The Coles Group Ltd (ASX: COL) share price was a strong performer in January, rising just over 7% during the month.
As a comparison, the ASX 200 managed to carve out a gain of 3.9% for the month.
The supermarket giant's shares have continued this solid form today and are up almost 1% to $12.61 in late morning trade.
Is it too late to buy Coles shares?
I don't believe it is too late to buy the supermarket giant's shares and feel they are still great value at the current level.
Although little is known about its earnings and dividend expectations for FY 2019 following its demerger from Wesfarmers Ltd (ASX: WES), analysts have been busy estimating what these will be.
A recent broker note out of Goldman Sachs reveals that its analysts expect Coles to deliver earnings per share of 75 cents in FY 2019.
Based on this estimate, Coles shares are changing hands at approximately 16.5x forward earnings at present.
This compares favourably to Woolworths Group Ltd (ASX: WOW) shares which are currently trading at around 22.5x estimated forward earnings.
Goldman has a buy rating and $14.30 price target on Coles' shares.
What about its dividend?
A note out of Macquarie Group Ltd (ASX: MQG) last year reveals that its analysts expect a dividend of 65.7 cents per share in FY 2019.
If this estimate proves accurate it means Coles shares currently provide a forward fully franked 5.2% yield.
Macquarie currently has a neutral rating and $13.48 price target on the company's shares.
Should you invest?
Given its defensive qualities, generous potential dividend, and the fact that the grocery category has been one of the few highlights in the retail sector in recent months, I think Coles would be a great investment at these levels.
I would suggest investors choose it ahead of rival Woolworths at this point in time.
