WOW

About WOW

Woolworths (WOW) is a retail operator in Australia and New Zealand, with 3,357 stores and approximately over 190000 employees. Its business division comprises of Australian Food, New Zealand Food and Big W.

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What does Woolworths Group Limited (WOW) do and how does it earn money?

The Fresh Food People – and beyond. Woolworths Group Limited is an operator of retail stores throughout Australia and New Zealand, with grocery stores being their mainstay.

Based in Bella Vista, north-west Sydney, the group earns revenue via three main segments:

• Australian Food — This segment ensures the procurement of food and related products for resale as well as the provision of food related services to customers. The segment operates 1,076 Woolworths Supermarkets and Metro Food Stores throughout Australia.

• New Zealand Food — This segment does the same as the Australian Food segment in New Zealand. It operates across 184 Countdown Supermarkets as well as a wholesale operation that supplies a further 71 stores with food and food related products.

• BIG W — The BIG W segment procures discount general merchandise products for resale to customers across 176 stores throughout Australia. BIG W offers customers everything from discount clothing, gardening items, pet items, books, snack food, electrical appliances and much more.

Woolworths Group also offers eCommerce solutions to customers via each of its business segments.

The company was formerly known as Woolworths Limited but changed its name to Woolworths Group Limited in December 2017.

Does Woolworths Group still operate Endeavour Group?

The Endeavour Group – which runs a plethora of drinks and hospitality businesses including 251 Dan Murphy’s, 1,392 BWS stores, 339 hotels and over 12,000 pokie machines – demerged from the Woolworths Group on 28 June 2021.

The demerger was approved by shareholders and resulted in Endeavour Group being classified as a discontinued operation by Woolworths Group.

Endeavour Group is now a standalone business with its own listing on the ASX under the ticker code EDV.

Is Woolworths Group a profitable company?

Yes, Woolworths Group is profitable, but the company’s net income has been up and down since FY2018. To put it into perspective, Woolworth’s net income for FY2018, FY2019, FY2020 and FY2021 was $1.7b, $1.6b, $1.17b and $2.07b, respectively.

The company’s net income dropped in FY2020 due to escalating operational costs caused by the outbreak of COVID-19 around the world.

Are Woolworths shares a good buy?

For some investors, WOW stock is a healthy long-term buy and hold investment. The Woolworths and BIG W brands are ubiquitous throughout Australia, while Countdown’s presence is also strong in New Zealand.

While the company’s revenue and income has been a little up and down due to the coronavirus outbreak in recent years, the company remains profitable and has paid dividends without fail since 1993. 

Other investors are more bearish, wary of the effects of inflation, escalating interest rates and the possibility of a worldwide financial market meltdown. Further to the bear case, Woolworths Group is still struggling with worldwide supply chain problems brought about by COVID-19.

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Does WOW stock pay dividends?

Yes, WOW’s dividend history is a long one going back to 1993. The company has not stopped paying dividends since then. Even when many Australian companies stopped paying dividends during the coronavirus pandemic, Woolworths Group continued to distribute them.

In 2021, WOW stock paid a dividend of $0.53 in April and another dividend of $0.55 in October for a total of $1.08 per share for the year. WOW’s April 2022 dividend was of $0.39.

Woolworths Group also offers shareholders a dividend reinvestment plan (DRP) for the convenience of automatically reinvesting WOW dividend payouts into more WOW stocks.

Who owns WOW stock?

The general public holds the most WOW stock at 74.8% of the total float. Institutions come in behind the public at 25.1%. Individual insiders hold 0.07%.

Some institutions with the most significant portions of the pie include BlackRock (6.7%), State Street Global Advisors (5.08%), The Vanguard Group (4.61%), Teachers Insurance and Annuity Association of America - College Retirement Equities Fund (0.28%), Charles Schwab Investment Management (0.26%) and Columbia Management Investment Advisers (0.14%).