The Best Discounted Grocery Store Income Play in Today’s Market

[Intelligent Income Daily]( Welcome to Intelligent Income Daily, the free newsletter from wealth and income expert Brad Thomas. In it, Brad and his team share the safest, most reliable ways to earn and grow your income in any market condition. Please note: We will now publish Intelligent Income Daily Tuesday, Wednesday, and Thursday. You can find all past issues [here](. And if you have any questions, please contact Brad and his team [here](. The Best Discounted Grocery Store Income Play in Today’s Market By Brad Thomas, Editor, Intelligent Income Daily Do you remember the good old days when everything was cheaper? Thankfully, inflation has slowed down to just 3.4% over the past year. But that doesn’t mean prices are going back down. It just means they’re not going up as fast. That’s why everybody feels bad even though the economy is doing pretty well. And why shoppers keep looking for better deals. But there’s one deal that seems to be inflation-proof: Costco’s hotdog combo. Since 1984, Costco has sold its hotdog combo for $1.50 – even though 40 years later – inflation has caused prices to nearly triple. It’s just one of the reasons Costco has millions of loyal members. And not just in America, but all around the world. The company opened a new store in Shenzhen, China, a couple of weeks ago. Tens of thousands of people lined up for hours just to get in and spend their money. And while this may convince you – like many others – to think Costco is a great investment right now… It’s not. Although Costco is a wonderful business (selling many things at great prices), its stock is currently overvalued. Today, I’ll show you why it’s not a good idea to invest in Costco right now. And give you the name of one of its competitors that offers a much better deal. Recommended Link [AI IS BORING!]( [image]( “AI’s all over the news. And AI stocks have gone on a tear. But there’s a huge problem with AI: it’s BORING! Consider ChatGPT, the most hyped AI… You ask it a question, and it produces an answer. It’s just a word machine. Yawn! I’m tired of boring AI, even though I used [what Harvard calls the “Super Platform driven by AI”]( to make over a million bucks in 2022. So forget ChatGPT! [Let me show you an exciting AI.”]( – Colin Tedards [Here’s my 2-minute demonstration of Elon’s AI in action.]( -- Why Now Is Not the Time to Buy Costco Smart shoppers (and investors) know not to pay full price. Instead, they wait patiently for a sale before snapping up what they want. Grocery prices change every week. If you try to buy produce that’s out of season, you’ll probably pay an arm and a leg for the privilege. Other times, stores will mark down perfectly good food to sell it faster. The same thing happens in the stock market. Every day, you see a different price for companies that are – most of the time – not any different than they were the day before. So the smart investor finds the high-quality companies trading at a bargain and avoids the ones selling for full price. Right now, Costco is trading at full price. Its stock yields just 0.6% and trades at close to 44x earnings. That means if the company didn’t invest in its business and gave all its earnings to shareholders, it would take 44 years to get your money back. The last time Costco traded at a valuation this high was in early 2022. Share prices then quickly dropped by 32% in a single month. [Image] I don’t want you to fall into the same trap and invest right before another major price drop. A Better Discounted Play in This Market Over the past decade, Costco shares have traded at an average “normal” price of 34x earnings. Costco is a fantastic high-quality business, but I wouldn’t buy it at current prices. Instead, one of Costco’s biggest grocery competitors is trading at a discount right now. Kroger (KR) is the second largest grocery retailer in America. And it’s planning to merge with Albertson’s to grow even bigger. Though Kroger doesn’t have a membership program that gives an awesome deal on hot dogs, it does have a loyalty program that helps customers save on gas and groceries. With more than 62 million households enrolled, Kroger has a ton of data on what its customers want to buy. And as I showed you previously, it’s using [private label products]( and [artificial intelligence]( (AI) to help customers save money while also earning more profit. Kroger is a reliable dividend grower that has increased its payout 18 years in a row. It’s also a great recession-resistant business because people tend to buy more groceries and cook at home instead of eating out at restaurants when times are tough. Kroger shares currently yield 2.5% and trade at 10.8x earnings. That means it’s “on sale.” Historically shares have traded at an average of 13.3x earnings. So right now you can buy them for 19% off. So skip the pricey Costco shares and add some Kroger to your portfolio instead. Happy SWAN (sleep well at night) investing, Brad Thomas Editor, Intelligent Income Daily [Wide Moat Research]( Wide Moat Research 55 NE 5th Avenue, Delray Beach, FL 33483 [www.widemoatresearch.com]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. Wide Moat Research welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. To contact Customer Service, call toll free Domestic/International: 1-888-415-6046, Mon–Fri, 9am–5pm ET, or email us [here](mailto:feedback@widemoatresearch.com). © 2024 Wide Moat Research. All rights reserved. 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