Is it a good company at a reasonable price? This is a solid stock that has done well for its shareholders over time. I am pleased to own this stock. It is a dividend growth stock with a total return generally over 8% per year with returns from both dividends and capital gains. However, I would suggest caution in buying this stock at the current price as it does seem relatively expensive or above the median in price. It is testing as reasonable, but above the median, but number of tests is showing the stock as expensive.
I own this stock of Metro Inc (TSX-MRU, OTC-MTRAF). I have done well with this stock. I have had it since 2004 and I have made a total return per year of 16.21% to the end of November 2025 with 14.22% from capital gains and 1.99% from dividends. On my original purchase price of this stock, I currently have a 25.13% dividend yield. This is why you buy dividend growth stocks. When I was updating my spreadsheet, I noticed I have made a total return per year of 16.21% on this stock since buying it in 2004 with 14.22% from capital gains and 1.99% from dividends. This is a good solid company that is a dividend growth stock.
If you had invested in this company in December 2015, for $1,007.24 you would have bought 26 shares at $38.74 per share. In December 2025, after 10 years you would have received $247.17 in dividends. The stock would be worth $2,547.22. Your total return would have been $2,794.39. This would be a total return of 11.26% per year with 9.72% from capital gain and 1.54% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $38.74 | $1,007.24 | 26 | 10 | $247.17 | $2,547.22 | $2,794.39 |
The current dividend yield is low with dividend growth moderate. The current dividend yield is low (below 2%) at 1.49%. The 5, 10 and historical median dividend yields are also low at 1.62%, 1.60% and 1.52%. The dividend growth is moderate (8% to 14% ranges) at 10.6% per year over the past 5 years. The last dividend increase was in 2025 and it was for 10.45%.
The Dividend Payout Ratios (DPR) are good. The DPR for 2024 for Earnings per Share (EPS) is good at31% with 5 year coverage at 30%. The DPR for 2024 for Adjusted Earnings per Share (AEPS) is good at 30% with 5 year coverage at 29%. The DPR for 2024 for Cash Flow per Share (CFPS) is good at 15% with 5 year coverage at 14%. The DPR for 2024 for Free Cash Flow (FCF) is good at 27% with 5 year coverage at 28%. I got two values for FCF of $1,161M and $1,214M. I am using the $1,161M value.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 31.21% | 30.03% |
| AEPS | 30.29% | 28.94% |
| CFPS | 14.52% | 14.04% |
| FCF | 27.29% | 28.14% |
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2025 is good at 0.15 and currently at 0.15. The Liquidity Ratio for 2025 is Low at 1.30 and 1.30 currently. If you added in Cash Flow after dividends, the ratios are fine at 1.85 and currently at 1.80. The Debt Ratio for 2025 is good at 1.94 and 1.94 currently. The Leverage and Debt/Equity Ratios for 2025 are fine at 2.06 and 1.06 and currently at 2.06 and 1.06.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.15 | 0.15 |
| Intang/GW | 0.30 | 0.30 |
| Liquidity | 1.30 | 1.30 |
| Liq. + CF | 1.85 | 1.80 |
| Debt Ratio | 1.94 | 1.94 |
| Leverage | 2.06 | 2.06 |
| D/E Ratio | 1.06 | 1.06 |
The Total Return per year is shown below for years of 5 to 35 to the end of 2025. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2020 | 5 | 10.55% | 13.38% | 11.71% | 1.67% |
| 2015 | 10 | 12.37% | 11.35% | 9.81% | 1.54% |
| 2010 | 15 | 13.51% | 15.14% | 13.36% | 1.78% |
| 2005 | 20 | 12.87% | 13.58% | 12.04% | 1.54% |
| 2000 | 25 | 14.56% | 16.30% | 14.38% | 1.92% |
| 1995 | 30 | 18.03% | 16.78% | 14.85% | 1.94% |
| 1990 | 35 | 21.28% | 18.50% | 2.78% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 15.97, 18.54 and 20.91. The corresponding 10 year ratios are 15.70, 17.66 and 20.24. The corresponding historical ratios are 13.17, 13.34 and 18.06. The current ratio is 21.07 based on a stock price of $99.01 and EPS estimate for 2026 of $4.70. The current ratio is above the 10 year median high ratios. This stock price testing suggests that the stock price is relatively expensive.
I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 15.72, 17.55 and 19.21. The corresponding 10 year ratios are 15.37, 17.52 and 19.83. The corresponding historical ratios are 13.82, 16.66 and 18.27. The current ratio is 18.90 based on a stock price of $99.01 and AEPS estimate for 2026 of $5.24. The current ratio is between the median and high ratios of the 10 year median high ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a Graham Price of $58.80. The 10-year low, median, and high median Price/Graham Price Ratios are 1.21, 1.37 and 1.51. The current ratio is 1.59 based on a stock price of $99.01. This ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I get a 10-year median Price/Book Value per Share Ratio of 2.41. The current ratio is 3.03 based on a stock price of $99.01, Book Value of $7,032M and Book Value per Share of $32.70. The current ratio is 26% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get a 10-year median Price/Cash Flow per Share Ratio of 11.35. The current ratio is 13.31 based on a stock price of $99.01, Cash Flow estimate for 2026 of $1,600M and Cash Flow per Share of $7.44. The current ratio is 17% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get an historical median dividend yield of 1.52%. The current dividend yield is 1.49% based on a stock price of $99.01 and dividends of $1.48. The current dividend yield is 1.7% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10 year median dividend yield of 1.60%. The current dividend yield is 1.49% based on a stock price of $99.01 and dividends of $1.48. The current dividend yield is 6.6% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.
The 10-year median Price/Sales (Revenue) Ratio is 0.80. The current P/S Ratio is 0.94 based on Revenue estimate for 2026 of $22,681M, Revenue per Share of $105.47 and a stock price of $99.01. The current ratio is 18% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
Results of stock price testing is that the stock price may still be reasonable but at the top of the range. The dividend yield testing is saying that the stock price is reasonable, but above the median. This is confirmed by the P/S Ratio test. The rest of the testing is showing the stock price as reasonable but above the median or expensive.
When I look at analysts’ recommendations, I find Strong Buy (2), Buy (1), Hold (6) and Underperform (1). The consensus is a Buy. The 12 month target price of $105.82 with a high of $118.00 and low of $80.00. The 12 month stock price consensus price of $105.82 implies a total return of 8.37% with 6.88% from capital gains and 1.49% from dividends based on a current stock price of $99.01.
Analyst on Stock Chase has various opinions. One liked Loblaws better. One had concerns over politicians screaming about the price of groceries. One said it was a tough business with low margins and competitive. Demetris Afxentiou on Motley Fool says it is a defensive stock with a long dividend growth streak. He also says that metro operates one of the largest pharmacy networks in Canada under various banners. Jitendra Parashar on Motley Fool says Metro could be a great stock that might not move fast, but it keeps delivering strong results quarter after quarter. The company put out a press release via Newswire about their fourth quarter of 2025.
Simply Wall Street via Yahoo Finance reviews this stock and thinks it is undervalue and has a fair value of $120.22. Simply Wall Street has one warning of has a high level of debt.
Metro is the third-largest grocery retailer in Canada and also owns the top pharmacy chain in Quebec, Jean Coutu. Metro operates both as a food retailer and a franchisor, licensing its trademarks and supplying merchandise to registered pharmacists. The firm also acts as a wholesaler and distributor to serve smaller, neighborhood grocery stores. Metro's operations are concentrated in Quebec and Ontario. Its web site is here Metro Inc .
The last stock I wrote about was about was TWC Enterprises Ltd (TSX-TWC, OTC- CLKXF) ... learn more. The next stock I will write about will be Bank of Montreal (TSX-BMO, NYSE-BMO) ... learn more on Monday, January 5, 2026 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
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