Growth and Dividend Plays Defying Market Volatility

Amid ongoing market fluctuations, certain ASX 200 companies continue to exhibit remarkable resilience. Notably, dividend-paying stocks like Coles Group and Metcash Limited have emerged as promising options for investors looking to balance growth with stability.

Coles Group Limited (ASX: COL)

Coles Group’s third-quarter FY25 performance highlighted steady momentum, with total sales revenue climbing 3.4% year-over-year to $10.38 billion. The supermarket division led the way with 3.7% growth, reaching $9.4 billion, while liquor sales rose 3.4% to $813 million. Although revenue from other segments declined 9.3%, the group’s half-year results remained strong, with overall sales hitting $23.04 billion and underlying EBIT growing by 8.9%.

The company’s focus on affordability and quality through campaigns such as “Great Value, Hands Down” and its expanded private-label range continues to enhance customer appeal. Coles is also advancing its digital capabilities, reflected in a 22.6% rise in online supermarket sales and a 9.2% boost in eCommerce liquor transactions.

In line with its long-term strategy, Coles is investing in automation to strengthen its supply chain. A third automated distribution centre (ADC) is currently underway. Additionally, cost management efforts have already yielded $157 million in savings through its “Simplify and Save to Invest” initiative.

A fully franked interim dividend of 37 cents per share has been declared, underlining Coles’ commitment to rewarding shareholders while pursuing growth through innovation and operational excellence.

Metcash Limited (ASX: MTS)

Metcash, a leading wholesale distributor serving independent retailers across Australia, delivered a 6.3% year-over-year increase in Group Revenue, reaching $9.6 billion in the first half of FY25. Underlying EBIT held steady at $246.1 million, while reported profit after tax ticked up 0.6% to $141.8 million. Though underlying profit after tax fell by 5.5%, the company’s diversified model across Food, Liquor, and Hardware segments provided a buffer against external pressures.

Growth in the Food division was driven by increased supermarket performance and the acquisition of Superior Foods. The Liquor segment gained market share and achieved solid sales growth, though earnings dipped slightly. Meanwhile, the Hardware arm was affected by weaker trade activity, though it maintained its market presence.

Despite macroeconomic challenges—including inflation and shifting consumer behaviors—Metcash’s strategic focus on supporting independent businesses and its multi-sector portfolio position the company well for future opportunities as market conditions improve.

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