The Benefits Of Investing In Wm. Morrison Supermarkets plc

Today I am outlining why Morrisons (LSE: MRW) could be considered an attractive addition to any stocks portfolio.

Open all hours… Well, nearly

Like its mid-tier supermarket rival Tesco, Northern grocery chain Morrisons has suffered heavy revenues losses in recent times as both discount and premium retailers have muscled in on their territory and an intensifying price war has hammered takings at the till.

Indeed, latest sales figures released by research house Kantar Worldpanel showed Morrisons’ sales dip 3.8% during the 12 weeks to July 20, pushing its market share 50 basis points lower from the corresponding 2013 period to just 11%.

Morrisons’ attempts to adapt to changing consumer habits have undoubtedly failed to click into gear thus far, although the firm’s latest morrisonsinitiative could prove a masterstroke in attracting the modern shopper back though the doors.

From this week the business plans to extend opening hours across 230 of its 490-strong supermarket suite from 6am to 11pm, a scheme that it hopes will strike a chord with the growing number of people who choose to shop early in the morning or late at night in tandem with the rise of flexible working hours. Morrisons will be hoping that the appeal of extended trading times will prove as successful for its superstores as it has for the country’s convenience store sub-sector.

The company has been late to the party in terms of adapting to other changing customer dynamics, too, exemplified by its entry to the online marketplace in January when its rivals had been pulling in internet customers for years. But Morrisons seems to be finally getting to grips with the changing industry landscape, a situation that could prompt a renaissance in group earnings.

Delicious dividend yields on the table

Morrisons has long been a favourite among the investment community’s income hunters, and the supermarket is predicted to continue churning out bumper dividends during the medium-term at least.

Even though trouble at the tills is expected to drive earnings 52% lower this year, City brokers still expect the grocer to lift the full-year dividend 4% to 13.5p per share. This projection creates a gigantic 7.8% yield, trouncing the current forward average of 3.3% for the FTSE 100.

And although Morrisons is anticipated to cut the payout to 11.8p in fiscal 2016, this prediction still carries an impressive 6.8% yield.

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Royston Wild has no position in any shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.