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Loblaw Companies Limited (L)
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Alimentation Couche-Tard Inc. (ATD)
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Premium Brands Holdings Corporation (PBH)
Q: In consumer staples I currently own PBH and have for years in a registered account. Wondering if it's time to move on to either L or ATD. How would you compare these and which do you prefer? Thank you
5i Research Answer:
Although the three names mentioned are classified as consumer staples, these are not simple apple-to-apple comparisons, ATD operates as a niche retailer, PBH provides food products, and L is a grocer. Given the different capital intensity of each business, the valuation multiples also vary. We have been a fan of ATD and PBH for quite some time, we think both are currently trading at attractive valuations due to the near-term headwind for each. Based on the current prices, here is our order of preference (from most to least): ATD, PBH, L.