Most people buy their shares through online stockbrokers and lots of other goods online too. But there are times when you still need to hit the high street. Do the following retailersdeserve a place in your portfolio?
Kingfisher
Kingfisher (LSE: KGF), parent company ofScrewfix, B&Q and French DIY chain Castorama, has hada solid five years, returning 33% in that time against just over 5% on the FTSE 100 as a whole. This is a steady performance given the challenges the rise of online shopping poses for the hard-pressed UK high street. However, Kingfisher has always seemed a bit of a mishmash to me, with a mixture of trade and consumer businesses and a disappointing lack of synergy between the two.
Itsrecent trading update exemplifies this, with Kingfisher opening 10 new Screwfix stores whilesimultaneously shutting down another 10 B&Q stores. It has now closed40 out of itstarget of 65 stores. Sosales growth in one part of the business has been offset by falls elsewhere. Chief executiveVronique Laury is the latest boss to try to bring unity where there has been none, under her One Kingfisher five-year plan. But she has a big job on her hands. With the stock trading at a pricey16.86 times earnings and yielding 1.86%, this is one investor who isnt going to B&Qit.
Dixons Carphone
The collapseof rivals Comet and Phones 4U handedDixons Carphone (LSE: DC) the equivalent of an open goal, but investors have little reasonto celebrate yet as the stock is down3.5% over the past year. Yet this weeks trading statement was delivered withallthe pep and bounceof a carphone salesman, with excitable talk of a very strong year for Dixons. Profits before tax arenow expected to be between 445m and 450m for the year, in the top half of previous guidance, with group like-for-like revenues up 5%.
Group chief executive SebJames has acknowledged concerns on the UK high street but reckons it doesnt apply to hisbusiness. Our view is that consumers are ready to spend but have rightly become more canny, and so need to be tempted with great deals and exciting new products, he says. And you wont be surprised to hear that this isDixons Carphones stock-in-trade. Cynicism aside, this is an interesting play on the consumer electronics revolution and forecast double-digit EPS growth looks encouraging, if youre willing to pay 16.39 times earnings.
J Sainsbury
Grocery chain J Sainsbury (LSE: SBRY) has been lacking in pep and bounce over the last five years, during which timeits share price has fallen by more than 20%. Ithas actually risen to the challenge of food deflation and the German low-priceinvasion better than some of its rivals. Recent full-year results show volumesand transactions both rising, and itsnon-food operation helping to offset the slowdown in its foodand drink operations.
Other reasons for its success includeproduct quality improvements, asimpler pricing strategy, and its multi-channel strategy, which delivered strong growth in both convenience and online sales. It would take a lot for me to invest in this troubled supermarket sector, but a valuation of 11.06 times earnings, a yield of 4.51%, and the recent acquisition of Argos would parkSainsburysat the top of mylist.
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Harvey Jones has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.