A High-Yield "Royal" Retailer

Strong Returns And Still Cheap!

August 23, 2025

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The Vanguard S&P 500 ETF is up 10.10% year-to-date.

Meanwhile, Koninklijke Ahold Delhaize N.V. is up 25.82%.

And, despite beating the market, Ahold Delhaize is still cheap. Plus, the company is offering a 3.15% starting dividend yield that’s well-covered by the firm’s safe payout ratio.

If you’re unfamiliar with this business, Ahold Delhaize is a retailer that operates supermarkets and convenience stores. This is a Dutch company that dates all the way back to 1867. And, the firm is internationally diversified with operations in Europe, North America, and Indonesia.

With many stocks trading at sky-high valuations, Ahold Delhaize could be a great income investment that also offers plenty of long-term capital appreciation potential.

Here’s why…

Koninklijke Ahold Delhaize N.V. ($ADRNY)

“Koninklijke” is a Dutch term meaning "Royal." It's a title granted by the Dutch monarchy to companies or organizations that are at least 50 years old and have made notable contributions to society.

Ahold Delhaize is one of these royal businesses.

The company traces its roots all the way back to 1867. And today, Ahold Delhaize operates a multitude of supermarket and convenience store chains throughout the world. The firm owns the “Albert Heijn“ and “Etos“ chains in the Netherlands, “Delhaize“ in Belgium, “Alfa-Beta“ in Greece, “Super Indo” in Indonesia, and "Food Lion" and "Stop & Shop" in the United States.

In total, Ahold Delhaize serves 72 million customers every week.

Like many European companies, Ahold Delhaize pays a semi-annual dividend. Additionally, the firm pays its dividend in euros which means U.S. investors may expirience fluctuations in the payments they receive due to currency conversion rates.

Those are the downsides.

The upsides?

Ahold Delhaize is a relatively inexpensive stock trading at a price to earnings ratio of 13.42. The company currently offers a 3.15% starting dividend yield. And, the firm’s payout ratio of 42.34% means there’s little chance of a dividend cut.

On top of this, Ahold Delhaize has a 10-year average annual total return of 12.16%.

This is lower return than the Vanguard S&P 500 ETF’s 15.03%.

But, Ahold Delhaize is also a cheaper stock with a higher starting yield.

  • Forward PE ratio of 13.42

  • 3.15% starting dividend yield

  • 5-year dividend CAGR of 3.47%

  • Payout ratio of 42.34%

  • 10-year average annual total return of 12.16%

NVIDIA Corporation, Microsoft Corporation, Apple Inc., and Amazon.com, Inc. currently compose over 25% of the S&P 500’s total index weight. When an investor buys $100 worth of an S&P 500 ETF, $25 is going to these four companies while the remaining $75 is getting divided up between the fund’s 496 other holdings.

If there’s a slowdown or pullback in tech, the S&P 500 could lose a lot of its momentum.

Meanwhile Ahold Delhaize is a well-established business trading at a relatively low valuation while still delivering a 10-year average annual total return of 12.16%.

I like Ahold Delhaize.

This is a successful business that’s globally diversified and pays a decently high starting yield that’s protected by the firm’s relatively low payout ratio.

Additionally, if Ahold Delhaize maintains its average annual total return of 12.16%, shareholders could expect to double their money every 5.93 years. That’s a rate of return high enough to turn an initial $10,000 investment into more than $31,250 over the course of a decade.

Ahold Delhaize isn’t the most exciting stock. But it is a long-term winner with a solid foundation. And this business could be a great buy and hold investment.

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Disclaimer: This article is for entertainment purposes only. It is not financial advice, always do your own research.