Is Loblaw Stock a Buy Ahead of Earnings?

Loblaw Companies (TSX:L) is a Brampton-based food and pharmacy retail company that also has its hand in apparel, general merchandise, financial services, and wireless mobile products businesses. This is the largest grocery retailer in Canada. Its shares have climbed 4.8% in 2023 as of close on April 14. The stock is up 10% year over year.

This company is set to deliver its first quarter fiscal 2023 earnings before markets open on May 3, 2023. Canadian grocery retailers have been some of the best bets for investors since the COVID-19 pandemic hit. Indeed, these stocks were some of the few investors could rely on as they thrived as an essential service.

Investors got to see the company’s fourth quarter and full year fiscal 2022 earnings on February 23. In Q4 2022, revenues increased 9.8% to $14.0 billion. Meanwhile, adjusted EBITDA climbed 12% to $1.49 billion. For the full year, Loblaw Companies delivered revenue growth of 6.3% to $56.5 billion. Both Food and Drug retail achieved same-store sales growth of 4.7% and 6.9%, respectively. It reported adjusted net earnings of $2.26 billion or $6.82 per diluted share – up 18% and 22%, respectively, compared to the prior year.

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Shares of this TSX stock currently possess a solid price-to-earnings ratio of 21. Moreover, Loblaws offers a quarterly dividend of $0.405 per share. That represents a modest 1.2% yield. This stock is still trading in favourable territory compared to its industry peers. I’m looking to stack more shares of Loblaws ahead of its next earnings report.