The Coles Group Ltd (ASX: COL) share price has been a pretty decent performer over the last few months. Since 14 May, Coles shares have risen almost 20%, which includes making a new all-time high of $18.32 earlier this month. At the time of writing, the Coles share price is going for $17.96, which translates into a price-to-earnings (P/E) ratio of 20.2 and a trailing, fully franked dividend yield of 2.34% (3.34% grossed-up).
Coles is a consumer staples giant that investors flocked to when the coronavirus pandemic first struck. Although panic buying and the now-infamous hoarding of household essentials boosted Coles' sales in March and April, things have arguably quietened down for the supermarket chain. So is the Coles share price still a buy today?
Coles launches new range of collectables
According to reporting in today's Australian Financial Review (AFR), Coles is poised to launch a new range of collectables. Coles' first foray into collectables came a few years ago in the form of the 'Little Shop' toys. It was a raging success and prompted a 'collectables' war with arch-rival Woolworths Group Ltd (ASX: WOW) that lasted until the start of this year. With the pandemic taking over priorities at Coles, it's been radio silence for a while on any new collectables range. Until now.
The AFR reports that Coles' new campaign will come in the form of pocket-sized children's books. These will be produced in partnership with beloved children's author Andy Griffiths and illustrator Terry Denton. The series will reportedly 'draw inspiration from the award-winning Treehouse series'.
There will be 24 books in the series, including (of course) 4 'rare' editions. Customers will be eligible for a 'free' book if they spend $30 or more in a single Coles shop.
The pocketbooks follow Coles' Little Shop and Little Shop 2 promotions of recent years, as well as Woolies' Lion King 'Ooshies' and 'Secret Garden' plant campaigns.
Is the Coles share price a buy today?
I think Coles' new campaign could be a success for the company. I believe there's a reasonable chance that branching out into books might be a hit with educationally-minded parents and collectable-loving kids alike.
However, just because Coles' new program might hit the right note with consumers, this doesn't mean Coles shares are necessarily a buy today. From where I'm standing, the Coles share price is at least being priced at fair value right now, and possibly even at a premium given its defensive nature as a business. A 2.34% dividend yield isn't something to write home about either, in my view.
Further, with this announcement, it's highly likely Woolworths will be dreaming up a rival scheme of its own, which could steal the wind from Coles' sales, just like it did with the Ooshies toys.
Foolish takeaway
I think Coles is a solid business and certainly has a place in a diversified dividend portfolio. But I'm not too excited about the Coles share price or dividend potential right now. This new collectables campaign (even though it could be a hit) doesn't change my mind on this thesis.
