Kroger: Acquiring A Portion Of Safeway's Assets Could Enhance Long-Term Growth

(SeekingAlpha) - When a potential investor looks to establish a long-term position in one particular sector, a near-term asset-based acquisition can weigh quite heavily on one's decision to move forward with a particular company. With that said, I not only wanted to examine Kroger's (KR) recent inquiry with regard to acquiring some of Safeway's (SWY) assets, but also highlight a number of reasons why I'm staying fairly bullish on shares of this grocery store play that offers investors a fairly moderate yield.

Company Overview

Headquartered in Cincinnati, Ohio, The Kroger Company, together with its subsidiaries, operates as a retailer in the United States. The company also manufactures and processes food for sale in its supermarkets. It operates retail food and drug stores, multi-department stores, jewelry stores, and convenience stores. The company's combination food and drug stores provide natural food and organic sections, pharmacies, general merchandise, pet centers, fresh seafood, and organic produce.

Recent Performance & Trend Behavior

On Monday, shares of KR, which currently possess a market cap of $21.60 billion, a forward P/E ratio of 13.45, and an annual dividend yield of 1.57% ($0.66), settled at a price of $41.94/share. Based on its closing price of $41.94/share, shares of KR are trading 11.01% above their 20-day simple moving average, 10.14% above their 50-day simple moving average, and 9.49% above their 200-day simple moving average.