The Kroger Co. (NYSE: KR) stock presents a classic entry for buy-and-hold investors: it trades at a depressed multiple despite growth, yields at the high end of its historic range, and has all the hallmarks of an inflation-resistant stock. Those include brand strength, pricing power, a healthy balance, and capital returns. Brand strength and pricing power are tied to its consumer utility and market position: Kroger ranks as the fourth-largest retailer in the United States and the country's leading grocer, offering consumers what they can’t live without: food and daily necessities. The takeaway is that Kroger will never grow robustly but has a proven ability to drive cash flow in all cycles and support its capital returns.
Capital returns are a significant factor for this stock, not a token gesture. The dividend annualizes to $1.56 per share, yielding about 2.7% at recent prices, with shares trading near long-term lows, and the buyback reduces the count quarterly. While the accelerated share repurchase program enacted in 2024 has run its course, the company remains in a solid position and continues to buy back shares. Highlights from Q2 include $1 billion in buybacks, bringing the year-to-date total to $1.2 billion, with the remaining $800 million on the existing program expected to be completed soon.
