Here’s How Much $1,000 of Loblaw Stock is Worth After 10 Years

Invest in Loblaw Companies (TSX:L) may seem like the responsible choice. In fact, it is a big blue-chip company that offers dividends for investors. And yet, in the last few years it’s been a bit more volatile, with features that have boomed and then returned several times.

So today, let’s look at what happened in the last decade, and how much $1,000 is worth today. What’s more, we’ll examine whether a runup could happen again for Loblaw stock investors.

2013 to date

If you were an investor in Loblaw stock in 2013, you would have bought shares for about $38 in July of that year. Buy $1,000 worth, and you’re looking at about 26 shares.

Fast forward to today, and each share is now worth about $120 at TSX today. That means your 26 shares are now worth $3,120! That’s a total growth of 233% as of writing, and a huge improvement from your original investment.

But the question is whether it can also be achieved? It is important to note, share prices rose steadily for the first few years after 2013. We are still in a market that is growing after the Great Recession. But when the pandemic hit, the parts suddenly took a nosedive, followed by a long jump in the sky.

What happened?

The pandemic was initially bad for Loblaw stock, just like any other company. But investors know that essential services are still needed. This means Loblaw stock, and every company under its banner, can keep its doors open.

The company didn’t stop there though, and instead expanded its already available curbside delivery service. This revenue stream has seen a huge increase. Add that the government will help these essential service providers, and the shares continue to rise.

After the pandemic restrictions began, Loblaw’s stock began to expand further. It already carries Shoppers Drug Mart, but adds companies like Esso in its loyalty program. The company maintains a strong financial position as well through its PC Financial program. All in all, Loblaw stock remains a strong stock even today, with the important provider continuing to find growth even amid high inflation and interest rates.

What about the future?

We’re not going through another pandemic, at least I’m sure we won’t. But let’s assume that for this case we are not. Loblaw stock will never see another surge like it did during the pandemic-related boom in stocks. In the last three years, for example, shares have risen by 73%. That’s not unreasonable to think that the company will do the same.

That’s because while Loblaw stock is now Canada’s largest grocery provider, with multiple revenue streams available, expenses are also high. It costs a lot to set up a new grocery location, and without the new locations, there’s no reason for the stock to suddenly see a lot of cash flow. That is, unless it gains more. But nothing was said about that.

Bottom line

Does this mean anything to you? should not Buy it? Not a good idea either. Loblaw stock may return to the strength that investors bought it for in the first place. Even if it’s not going to be the growth stock we once knew, that’s fine by me.

What you get is probably the compound annual growth rate (CAGR) of the previous year. Between 2013 and 2019, for example, shares increased at a CAGR of 8.9%. That’s a solid rate. In addition, investors can collect a dividend yield of 1.5%. That’s why Loblaw stock should be considered by TSX investors today.