I made my first purchase of December this morning. This company actually wasn’t even on my watch list. I saw a news headline that SWY was moving forward their dividend to December and investigated a little further. I ended up buying 100 shares @ 19.12/share (near the high of the day) but I feel like the shares offer a fairly “safe” value.
From their website:
There are 1,678 Safeway stores across the US and Canada. These include 312 Vons stores in Southern California and Nevada, 112 Randalls and Tom Thumb stores in Texas, 4 Genuardi’s stores in the Philadelphia area, as well as 17 Carrs stores in Alaska.
Safeway has reduced their shares outstanding from 446M in 2007 to 240M in 2012. This is one reason they have such a low P/E of 8.4. I’m ok with this and will hold on to the company as long as they continue increasing their dividends. Their dividend has increased from .05/share in 2005 to .175 now. Safeway is a dividend challenger as they have increased their dividend for 8 straight years. They also have a payout ratio of just 31%. They have a 5-year CAGR of 19.7%.
With a current yield of almost 4% , this purchase of 100 shares will increase my yearly dividends by $70 and this will also push my forward 12-month dividends to more than $3000.