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I like to see a high FTSE 100 inventory that simply quietly flies underneath the radar. Given the numerous protection of the UK’s largest corporations, these shares might be arduous to search out.
Nevertheless, I believe J Sainsbury (LSE:SBRY) may be one that matches that description. I took a have a look at the grocery inventory to see if it’s one for worth traders to contemplate in 2025.
Latest buying and selling replace
The corporate kicked off the summer season with a little bit of cheer. Its most up-to-date buying and selling replace, for the 16 weeks to 21 June, confirmed like-for-like retail gross sales up 4.9%. Robust grocery section gross sales progress of 5%, and Argos-related merchandise climbing round 4.4%, helped to underpin the constructive end result.
This sturdy interval of buying and selling coincided with the corporate reaching its highest estimated market share in practically a decade. Regardless of the constructive information, the share worth response was pretty muted as shareholders gave the impression to be unmoved by the short-term win.
Valuation
The Sainsbury’s share worth has gained 6.7% thus far in 2025 and at present sits at £2.94 as I write on 7 August. That offers the inventory a price-to-earnings (P/E) ratio of 16.7 proper now. How does that stack up towards its friends and the broader market?
Tesco shares have gained 11.2% year-to-date and are altering fingers at a P/E ratio of 17.9. Equally, Marks & Spencer shares are buying and selling at a P/E ratio of 17.9 regardless of a 15.8% share worth slide in 2025 to this point. Which means Sainsbury’s seems to be a contact cheaper than its rivals however nonetheless inside an inexpensive vary.
The broader Footsie index has gained 10.8% this 12 months and has a mean P/E ratio of 17.9. Even accounting for the diversification advantages of a broad market index, I believe Sainsbury’s seems to be good on this context.
Dividends
I’m an enormous fan of the ‘chook within the hand’ principle and assume that Sainsbury’s may be value contemplating as a Footsie dividend inventory. The corporate has the next dividend yield than Tesco – 4.5% vs 3.3% – on the time of writing.
Notably, the corporate’s dividend yield can be increased than the Footsie common of round 3.5%. Given the corporate’s relative valuation and powerful latest efficiency, I believe the useful dividend is simply one other bonus.
Placing all of it collectively
I believe Sainsbury’s has been a stable performer and embedded member of the Footsie. I definitely don’t assume it’s screaming Purchase proper now, and the inventory isn’t with out danger.
The grocery sector is sort of fully client going through, which might affect on income and earnings if the financial system goes additional south and customers tighten their belts. Revenue margins are additionally notoriously skinny within the grocery enterprise and competitors is rife from each Tesco and low-cost operators like Aldi and Lidl.
All in all, Sainsbury’s latest share good points and relative worth towards its friends make it an attention-grabbing prospect. After all, diversification and a long-term perspective are key when investing, however Sainsbury’s might have a task to play in the fitting portfolio if traders are comfy with the dangers.
