Metcash has launched an off-market buyback of up to $175m and increased its dividend payout ratio to 70%.
Metcash is likely to deliver low levels of earnings growth within the 2 – 3% range. The earnings are well supported by improving trends in hardware and liquor. The stock trades on a forward dividend yield of 4.8%.
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We highlight that the Algo Engine switched to buy conditions in May at $3.40.
Our sector preference remains Woolworths.
