When the market gets noisy and headlines become chaotic, the smartest investors go quiet and lean into businesses they understand. One Canadian stock stands out for its simplicity, consistency, and long-term compounding potential, and that’s Metro (TSX: MRU). This isn’t a flashy tech stock or a speculative clean energy play. But for dividend investors looking for something they can buy now and hold for decades, it’s as close to a no-brainer as it gets.
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Into earnings
Metro has delivered dependable results for years, but the past 12 months have really underlined its strength. The Canadian stock is up over 20% year over year and has comfortably outpaced the TSX. It recently traded around $100, just a few points off its all-time high, and has shown minimal volatility thanks to its low beta of 0.28. That kind of stability is rare, especially during times of economic uncertainty.
What makes Metro so attractive right now isn’t just the price action but the numbers behind it. The grocery and pharmacy giant reported third-quarter results that were, once again, rock solid. Sales hit $6.9 billion, up 3.3% from the same period last year. Net earnings jumped 9% to $323 million, while earnings per share (EPS) grew even faster, up 13% to $1.48. The adjusted EPS came in at $1.52, up 12.6%. Those kinds of steady, high-single-digit gains are the hallmark of a business that knows exactly what it’s doing.
More to come
Food and pharmacy continue to be core pillars of Metro’s success. Same-store food sales were up 1.9%, while pharmacy sales climbed 5.5%, thanks in part to strong demand for prescription drugs and front-of-store items like cosmetics and over-the-counter products. But it’s not just same-store performance that’s driving results. Metro is growing its footprint. It opened five new food stores in the latest quarter and plans to keep that pace through the end of the year.
Metro’s ability to manage costs is equally important. Despite inflation and supply chain headwinds, operating income before depreciation and amortization grew 5.7% to $655.7 million in the quarter. Margins improved as productivity gains at distribution centres helped offset shrink. The Canadian stock has also been investing in automation and infrastructure, most notably in its new automated distribution centre in Terrebonne, Quebec.
Considerations
On the dividend front, Metro quietly delivers. The Canadian stock currently yields about 1.5%, which won’t grab headlines, but is backed by a low 30% payout ratio. That gives it plenty of room to grow the dividend in the future, and Metro has a track record of doing just that. The Canadian stock has increased its dividend annually for 29 consecutive years. That makes it one of Canada’s most consistent dividend growers, even if it rarely makes the front page. And right now, a $7,000 investment could bring in $102 annually!
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| MRU | $100.86 | 69 | $1.48 | $102.12 | Quarterly | $6,959.34 |
There are a few risks to watch out for. The grocery sector is competitive, and margin pressures from wage growth and promotional activity could weigh on results. Any economic downturn that hits consumer spending would also be a short-term headwind. But Metro has proven through multiple cycles that it can adapt and continue delivering value.
Bottom line
For investors building a long-term income portfolio, this is the kind of Canadian stock that deserves a permanent home. It offers a rare combination of stable earnings, smart capital allocation, consistent dividend growth, and a defensive business model that performs well even when the broader market stumbles.
You don’t have to chase hot trends to build wealth. Sometimes, the best opportunities are right in front of you at the grocery store. Metro is one of them. This is a buy-and-hold-forever kind of stock – reliable, growing, and quietly compounding year after year.
