WIth the pandemic going on, nearly every stock in the stock market has plummeted. Jobs are being lost. Tons of industries are being temporarily shut down.This article could be about Netflix. But they’re thriving because of luck of unusual circumstances. It could be about Amazon(which is in my Top 5 Stocks to Buy and Hold). But that one is just too obvious. Let’s talk Kroger here and why they’re a good recession stock.
Once the word of a stay at home order came out, people flocked for the grocery stores like there was no tomorrow.. I’m pretty sure that if Justin Bieber were on the toilet paper aisle, customers would have ran him over to get the last roll as if he didn’t exist. If Michael Jordan was having an autograph signing session in front of a hand sanitizer display, he would have got trampled like he was nothing. People were stocking up on food the whole month of March. What also benefited Kroger was the shutting down of retail stores to stop the spread of the virus. Kroger’s stores are one stop shop stores that also sell clothing.
Kroger(KR) entered 2020 as a $28 stock. Warren Buffett bought a large stake in them at the time. The stock shot up to $36 in March, then to drop back to $28 as the Market crashed in late March. Then the word must have got out that people were running out of Kroger stores with loads of toilet paper as if Oprah was hosting a show in there saying “you get TP! You get TP! Everybody gets TP!”. Because Kroger bounced back up to over $32 per share and has remained stable since.
So Why Invest in Kroger?
Besides some of the key points mentioned above. Kroger is one of very few companies not cutting or suspending their dividend. They are paying a 2% yield currently. I believe they will get more and more involved in the online game. Grocery stores are a good investment to have in any kind of recession. People will always need groceries. Kroger is a solid consumer staple to have in your portfolio. Or as all the cool kids are saying, an ESSENTIAL staple.