Some shares shine brightest not throughout growth instances, however throughout stretches of market uncertainty. That’s when long-term traders can discover dependable, under-the-radar gems hiding in plain sight. One such inventory is Empire Firm (TSX:EMP.A). It’s not flashy, and it’s not the type of Canadian inventory that dominates headlines. However on the subject of consistency, long-term worth, and revenue potential, Empire checks all of the containers. Even at all-time highs.
The inventory
Empire is considered one of Canada’s largest meals retailers. It owns well-known grocery chains together with Sobeys, Safeway, FreshCo, IGA, Longo’s, and Farm Boy. Which means it doesn’t matter what’s taking place within the broader financial system, Empire stays in enterprise, as a result of folks want groceries in good instances and unhealthy. With greater than 1,500 shops coast to coast, Empire has an enormous attain and a dependable buyer base that returns week after week.
The Canadian inventory’s newest earnings present simply how strong this enterprise is. In its third-quarter report for fiscal 2025, Empire posted internet earnings of $146.1 million, up from $134.2 million a 12 months earlier. That labored out to $0.62 per share, up from $0.54. Gross sales rose 3.1% to $7.7 billion, and same-store meals gross sales elevated 2.6%. Gross margins additionally improved from 26.5% to 27%, an indication the Canadian inventory is getting extra environment friendly with operations and managing prices. That is particularly necessary within the present inflationary setting, the place prices for all the pieces from meals to transportation are beneath strain.
Extra to come back
Empire isn’t simply resting on custom, both. The Canadian inventory has been investing closely in its e-commerce and digital platforms. Its Voilà grocery supply service, powered by Ocado’s automated warehouse expertise, is increasing. The partnership with Instacart for same-day supply, together with latest integration into Uber Eats, helps Empire meet trendy buying preferences. These efforts paid off with a 71.9% soar in digital gross sales 12 months over 12 months. Whereas e-commerce continues to be a small portion of complete income, it’s rising quick and positioning the corporate properly for the longer term.
One more reason to love Empire is its shareholder-friendly insurance policies. By means of its ongoing share buyback program, Empire repurchased 6.7 million shares at a median value of $39.84, placing $267.4 million again into shareholders’ fingers previously 12 months. The Canadian inventory additionally pays a dependable dividend, with a present yield of round 1.6% as of writing. Whereas it’s not the best yield on the TSX, it’s backed by a robust stability sheet and a gentle enterprise. For dividend traders, Empire gives peace of thoughts, particularly for these reinvesting dividends for long-term compounding.
Future focus
Financially, the Canadian inventory is in strong form. It reported $16.8 billion in complete belongings and $5.4 billion in fairness as of February 1, 2025. The low debt ranges and wholesome money flows imply Empire can proceed investing in development whereas nonetheless rewarding shareholders. It’s additionally value noting that Empire’s efficient tax fee was a manageable 27%, in step with expectations, and a mirrored image of accountable monetary planning.
Wanting ahead, Empire has a transparent technique in place. It’s engaged on bettering margins by automation and provide chain investments. It’s increasing its Farm Boy and FreshCo banners into extra elements of Canada, which ought to assist drive gross sales development. And it’s discovering new methods to compete with worldwide giants by specializing in contemporary meals, native suppliers, and customized buyer experiences.
Backside line
What makes Empire stand out proper now’s the chance to purchase right into a high-quality enterprise even at all-time highs. For long-term traders in search of a dependable inventory to tuck away, it’s a robust selection. Empire’s fundamentals are sturdy, and its long-term development story is unbroken. If something, it’s quietly getting higher.
So when you have some money on the sidelines and are in search of a Canadian inventory you should buy now and maintain for the following 10 or 20 years, Empire makes a robust case. It’s virtually excellent for affected person traders who worth consistency, dividends, and a Canadian inventory that is aware of evolve with out dropping sight of what works. Groceries won’t be glamorous, however they’re at all times in demand, and so is a Canadian inventory like this.
