Metro (TSX:MRU) steady rise over the past year has been anything but flashy. The dividend stock is up more than 17%, outpacing many peers in the consumer staples space. Plus, it’s done so without chasing risky growth or leaning on one-off gains. Instead, Metro delivered what long-term investors love: consistent results, disciplined expansion, and a balance sheet that can handle whatever the economy throws its way.
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Into earnings
In the third quarter of fiscal 2025, Metro posted sales of $6.87 billion, up 3.3% from a year earlier. Food same-store sales rose 1.9%, while pharmacy same-store sales jumped 5.5%, with strong demand in prescription drugs, over-the-counter items, and health and beauty. Online food sales grew 14.4%, showing that the company’s e-commerce push still has momentum even after last year’s surge. That blend of stable grocery demand and higher-margin pharmacy growth is one of Metro’s biggest strengths. It gives the dividend stock resilience against economic swings and a foothold in two essential spending categories.
Profitability continues to improve. Net earnings climbed 9% to $323 million, with adjusted net earnings up 8.8%. Diluted earnings per share (EPS) grew even faster, rising 13% to $1.48. On an adjusted basis, EPS hit $1.52, up 12.6%. Metro also kept operating expenses in check, holding them flat at 10.2% of sales. That’s despite inflationary pressures and investments in new initiatives like the Moi Rewards program expansion into Ontario.
Over the past 40 weeks of the fiscal year, sales grew 3.8%, and net earnings were up 12.7%. That’s a strong showing for a dividend stock in a sector where even low single-digit growth is considered healthy. Shareholders have benefited as well. Metro bought back 5.7 million shares since November at an average price of $98.55, returning over half-a-billion dollars in value. The dividend stock also pays a quarterly dividend of $0.37, representing a modest yield of around 1.5%, but with a payout ratio of just over 30%, there’s room for future increases. For now, a $10,000 investment could bring in $150 annually.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| MRU | $98.11 | 101 | $1.48 | $149.48 | Quarterly | $9,909.11 |
Looking ahead
One of the key things to watch is Metro’s ongoing investment in its retail and supply chain network. The dividend stock has been opening new stores at a steady clip and upgrading its distribution capabilities with automation technology. These moves aren’t just about efficiency. They’re about building capacity for future growth while keeping costs low. The completion of its fresh distribution centre in Toronto and the automated facility in Terrebonne have already started to pay off in better productivity.
Another factor in Metro’s stability is its balanced revenue mix. Groceries provide the dependable baseline, while pharmacy operations add growth and higher margins, bolstered by the Jean Coutu Group acquisition several years ago. The dividend stock also embraced loyalty and digital engagement more aggressively, which could drive higher customer retention and spending over time. The Moi Rewards program, now in Ontario, gives Metro another lever to pull in a competitive grocery environment.
Of course, there are risks. Food inflation has moderated but remains a variable that can affect consumer spending patterns and competitive pricing. Labour costs, supply chain volatility, and regulatory changes in pharmacy operations can also impact results. But Metro’s track record of managing these challenges is one of the reasons it’s viewed as a defensive stock. Even during periods of economic strain, people still buy groceries and fill prescriptions, giving Metro a dependable revenue base.
Bottom line
Looking ahead, Metro’s combination of disciplined capital allocation, shareholder returns, and operational improvements positions it well to keep delivering steady gains. It may not be the fastest-growing name on the TSX. Yet in a market where uncertainty is still a factor, Metro offers something just as valuable: reliability. For investors seeking a consumer staples giant that can weather any storm, Metro’s recent results suggest it’s more than up to the task.
