With a 6% dividend yield, should I buy Metcash shares today?

Metcash Ltd (ASX: MTS) shares are marching higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) wholesale food, liquor and hardware distributor closed yesterday trading for $3.05. In early afternoon trade on Wednesday, shares are swapping hands for $3.09 apiece, up 1.2%.

For some context, the ASX 200 is up 0.1% at this same time.

Taking a step back, Metcash shares remain down 8.3% since this time last year, trailing the 3.1% 12-month gains posted by the benchmark index.

Although that’s not including the 18 cents a share in fully franked dividends the company has paid out to eligible stockholders over this time.

At the current share price, Metcash stock trades on a fully franked 5.8% trailing dividend yield. Taking those franking credits into account, that equates to a grossed-up yield of 8.3%.

So, is the ASX 200 stock a good buy for passive income today?

Metcash shares: Buy, hold or sell?

Shaw and Partners’ Jed Richards recently analysed the outlook for this ASX 200 dividend stock (courtesy of The Bull).

“Metcash remains a quality defensive business with diverse earnings across food, liquor and hardware,” Richards said.

“Its strong customer network provides consistent cash flow and resilience during economic uncertainty,” he added.

Indeed, with inflation remaining well above the RBA’s target range, and future interest rate rises still on the cards, there’s more than enough economic uncertainty to go around.

As for the passive income on offer from Metcash shares, Richards said, “Recent updates show stable margins despite increasing cost pressures, and the company continues to generate an attractive dividend yield.”

Connecting the dots, Richards issued a hold recommendation on the ASX 200 dividend stock.

He concluded:

While growth is modest, its defensive characteristics and reliable income stream support a hold position. It remains well positioned to benefit from steady consumer demand.

What’s the latest from the ASX 200 dividend stock?

Metcash reported its unaudited full year FY 2026 results, covering the 12 months to 30 April, on 11 May.

Highlights included expected FY 2026 revenue growth of 0.7%. And on the bottom line, the company expects to achieve underlying net profit after tax (NPAT) between $268 million and $270 million.

The company reported improved sales momentum in its Hardware and Tools business, along with a range of ongoing cost cutting initiatives, forecasting at least $25 million in annualised savings in FY 2027.

“We have delivered a solid result supported by the resilience of our Food and Liquor businesses, our diversified portfolio and disciplined execution,” Metcash CEO Doug Jones said.

Metcash shares closed up 6.6% on the day of the results release.

The post With a 6% dividend yield, should I buy Metcash shares today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.