Coles – Where is Fair Value?

Coles has under invested in the supply chain and online platform vs Woolworths and therefore, investors need to be prepared for lower returns as Coles steps up capital expenditure over the coming years.

If we assume 3 – 5% EPS growth, (half that of WOW), Coles will offer a 5.4% dividend yield into FY20, based on earnings per share of $0.80

You're not a member!  Trial today!

Coles trades on 18x FY19 earnings and with little upside to the share price, we recommend investors add a covered call to enhance the income return.


Investor Signals Pty Ltd ABN 44 143 555 453 is a Corporate Authorised Representative CAR No. 439411 of Advisor Plus Pty Ltd AFSL 474520
© 2020 Investor Signals