Today, shares of Kroger appear to be trading within a reasonable range of where they have historically. In turn, it might be the expectation of the prudent investor that performance results could roughly track business results over the long term. For instance, in the Estimated Earnings and Return Calculator seen below a 10% expected growth rate with an assumed P/E ratio of 15 in five years' time would equate to a 12.4% annualized total return including dividends.
It's important to remember that this is simply a calculator, but it generally provides a strong baseline for how analysts are presently viewing this company.
More important, it should be evident that paying a "reasonable" price more or less equates to performance results that track business results over the long term. Overall, Kroger is a very strong player in the grocery market and has proven to not only be generous but also shareholder-friendly. However, as always, I recommend that the reader conduct his or her own further thorough due diligence.
At the time of publication the author had no position in any of the stocks mentioned.
This article was written by an independent contributor, separate from TheStreet's regular news coverage.
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