The Woolworths share price just hit a 52-week high

The Woolworths Group Ltd (ASX:WOW) share price hit a 52-week high on Tuesday. Is it too late to invest?

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The Woolworths Group Ltd (ASX: WOW) share price has started the week on a positive note on Tuesday.

In afternoon trade the conglomerate's shares climbed 1.5% to hit a 52-week high of $31.72. This stretched its 12 month return to a sizeable 18.5% excluding dividends.

Why is the Woolworths share price at a 52-week high?

Woolworths' shares have been on a solid run over the last 12 months thanks largely to improving trading conditions and the return of rational competition in the supermarket industry.

This led to the company's key Australian Food segment growing sales by 2.3% and earnings before interest and tax by 4% during the first half of FY 2019.

Woolworths also saw a big improvement in the performance of its BIG W business. It grew sales by 2.7% to $2,091 million during the half thanks to a positive second quarter driven by strong Toys and Leisure sales. And while the business is still making a loss, this loss has narrowed considerably.

Should you invest?

Whilst I think that Woolworths is a quality company, at 24x trailing earnings I feel its shares are a touch expensive at present based on its current growth profile and would suggest investors hold off an investment until they provide a more compelling risk/reward.

In the meantime, I think both Coles Group Ltd (ASX: COL) and Wesfarmers Ltd (ASX: WES) shares could be great alternatives for investors.

At present the Coles share price is changing hands at approximately 19x estimated full year earnings and Wesfarmers shares are trading at 20x estimated full year earnings.

Incidentally, earlier this month analysts at Macquarie put an outperform rating and $37.13 price target on Wesfarmers' shares and an underperform rating and $26.84 price target on Woolworths' shares. The leading broker remains neutral on Coles with a price target of $12.19.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended COLESGROUP DEF SET and Wesfarmers Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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