12 Undervalued Defensive Stocks for 2025

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6. The Kroger Co. (NYSE:KR)

Forward P/E: 13.14

Number of Hedge Fund Holders: 39

The Kroger Co. (NYSE:KR) is a food and drug retailer that operates supermarkets, fulfillment centers, and multi-department stores. Its brand portfolio includes Smart Way, Big K, Heritage Farm, Simple Truth Organic, and Simple Truth. The company operates approximately 2,722 supermarkets, 2,257 pharmacies, and 1,665 fuel centers in 35 US states and the District of Columbia.

Over nearly a decade, The Kroger Co. (NYSE:KR) has made substantial investments in its digital capabilities, investing in automation, creating distribution channels in delivery and pickup, building out its own properties, and enhancing personalization. This has resulted in an established digital business for the company that is positively impacting its financial results and improving its profitability. The company’s digital sales increased by 11% in the fiscal Q3 2024, affirming a new avenue for growth. Delivery sales were up by 18%, driven by customer fulfillment centers. The fact that digital sales account for just 10% of total sales also underlines the massive opportunity for growth amid the digital revolution.

Moving forward, The Kroger Co. (NYSE:KR) is focusing on utilizing automation, growing volumes, and introducing new technology to create efficiency gains. It is also focused on enhancing customer loyalty, expanding its digital footprint, and, most importantly, engaging in competitive pricing to drive sales and strengthen profit margins. The company’s performance reflects that it can continue to be profitable under various market circumstances, ranking it sixth on our list of the 12 undervalued defensive stocks from 2025.

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