8 Best Value Dividend Stocks to Invest in According to Warren Buffett

6. The Kroger Co. (NYSE:KR)

Forward P/E Ratio: 12.89

The Kroger Co. (NYSE:KR) is an American retail company that operates supermarkets and multi-department stores throughout the US. In recent months, the company has prioritized growing its private label products, improving its digital shopping experience, and exploring potential strategic mergers. Its success depends on staying competitive with pricing, strengthening customer loyalty, and broadening its online presence. In the past 12 months, the stock has surged by nearly 30%.

The Kroger Co. (NYSE:KR) reported strong sales results for the third quarter of 2024, driven by robust performance in its pharmacy and digital segments, showcasing the strength and versatility of its business model. During the quarter, the company expanded its customer base by offering exceptional value through competitive pricing, tailored promotions, and high-quality private-label products, all within a seamless shopping experience. The company’s revenue for the quarter came in at $33.63 billion, which fell by 0.95% from the same period last year. With a forward P/E ratio of 12.89, KR is one of the best value stocks according to Warren Buffett.

On October 4, 2024, The Kroger Co. (NYSE:KR) finalized the sale of its specialty pharmacy business for $464 million. This transaction led to a $340 million reduction in third-quarter sales compared to the same period the previous year, with annual sales expected to decrease by approximately $3 billion moving forward. Since the specialty pharmacy segment had low profit margins, the sale improved the company’s gross margin while increasing operating, general, and administrative expenses as a percentage of sales.

The Kroger Co. (NYSE:KR) holds a strong dividend history. The company has been growing its payouts for 18 consecutive years and currently pays a quarterly dividend of $0.32 per share. The stock has a dividend yield of 2.12%, as of January 28.

The Kroger Co. (NYSE:KR) was included in 39 hedge fund portfolios at the end of Q3 2024, down from 46 in the previous quarter, according to Insider Monkey’s database. The stakes owned by these hedge funds are collectively worth over $4.3 billion. Harris Associates was one of the company’s leading stakeholders in Q3.