Automation cuts Metro’s costs

Article Excerpt

METRO INC. $58 is a buy. The supermarket and drugstore operator (Toronto symbol MRU; Aggressive Growth Portfolio, Consumer sector; Shares o/s: 248.4 million; Market cap: $14.4 billion; Price-to-sales ratio: 0.8; Dividend yield: 1.7%; TSINetwork Rating: Average; www.metro.ca) continues to invest in automation to help cut its labour costs and boost efficiency. For example, it’s currently building a new distribution centre in Toronto that will use automated equipment to handle fresh and frozen foods. The facility should open in January 2022. Metro also plans to install self-serve checkouts in 90 more stores this year; about 260 stores already have this equipment. These investments should help lift Metro’s earnings in the fiscal year ending September 30, 2021, by 7.0% to $3.50 a share. The stock trades at a reasonable 16.6 times that forecast. The $1.00 dividend yields 1.7%. Metro is a buy. buy…