The Coles Group Ltd (ASX: COL) share price has been an outperformer in 2020. While the S&P/ASX 200 Index (ASX: XJO) is down 20.39% this year, Coles shares have climbed 9.30% higher.
But the panic buying in Aussie supermarkets has largely subsided. In fact, many are quietly positive about the economy starting to re-open and some restrictions being lifted.
So, what's the outlook like for the Coles share price in 2020?
Why the Coles share price could still be a buy
Despite outperforming so far this year, shares in the Aussie retailer haven't rocketed higher. That's something of a positive if you're looking to buy, because it's not like you've missed out on all of the potential growth.
I think one of the really big advantages of buying shares in Coles is the company's defensive qualities. I'm not sure we'll see a 50% share price surge in 2020 but that doesn't mean it's not worth buying.
There are some positive signs around the coronavirus pandemic here in Australia. However, it's a long road ahead and we haven't even really seen much data.
The big banks look set for a tough earnings season but we could see a deteriorating economy in the months ahead. One of the big challenges could be how well Australia copes with re-opening the economy and society.
Normally, I'd expect to see investors flock to the ASX gold shares in times of uncertainty. However, the Coles share price could be one to benefit from more volatility.
The supermarkets are certainly an essential service and I'd expect to see strong earnings in 2020. That could be good news for shareholders waiting to receive their dividends.
The Coles share price is trading at $16.22 per share at the time of writing, with a 2.59% dividend yield. If you're in the market for a defensive ASX dividend share in 2020, I think there are worse buys than Coles right now.
