Tesco Shares Are Worth Buying

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Tesco Shares Are Worth Buying

Are Tesco (Tsco) Shares Worth Buying?

Tesco (TSCO) shares price continues to trend higher and is now sitting near a five-year high. The company has also reported an increase in y/y sales despite the stubborn inflation.

Tesco also recently raised its dividend yield, which is now in double digits. On top of that, Tesco also repurchased its shares worth 1.45 billion.

Tesco Shares Price Near Ath

So, is it worth buying Tesco shares while it is trading near its ATHs, or should you wait for a correction? To understand this, we must take a look at the fundamentals of Tesco and the state of the global economy.

quick look at the US economy shows that confidence isn't that high. And when the US economy crashes, it also moves into the rest of the world, including the UK.

At times like this, defensive stocks like Tesco tend to do much better than other types of stocks. All the products and services of Tesco are always in high demand.

So, even if there is a market shock, then Tesco's stock will still continue to deliver a performance better than the market.

The soaring prices of Tesco shares have also caused the dividend yield to decline. But, given the strong dividend history of Tesco, there is no reason to believe that there will be any dividend cut.

In fact, Tesco shares are still doing much better despite the turbulence in the global markets. Even now, Tesco is facing competition from Lidl and Aldi, but has managed to hold its own.

So while the fears of a market crash are growing, it can be worth looking into the Tesco shares. It is a defensive stock with a solid history, which makes it ideal even during times of a market crash.

But, a far better strategy can be to wait for the Tesco shares to move lower from the ATH to get a better entry. It just doesn't make sense to get into Tesco shares while it is trading at such elevated levels.

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