The market has continued rebounding sharply in recent weeks, recovering some of the losses incurred during the coronavirus market crash in February and March. The upward momentum has likely piqued the interest of many people who have some extra cash sitting on the sidelines. While there's no way to guarantee the market will continue rising in the near-term, investors interested in deploying capital in stocks as the economy reopens can at least keep an eye out for high-quality stocks likely to outperform over the long haul.

One dividend stock with staying power that is trading at an attractive valuation today is Kroger (NYSE:KR). Not only is its business growing, but its digital sales growth and share repurchases could serve as meaningful catalysts for earnings per share appreciation over the long haul. Here's a closer look at the stock.

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Why Kroger?

While shares of grocery company Kroger have moved higher relative to March lows, they're still down about 8% since the coronavirus market downturn started on Feb. 19. This lower stock price gives investors an attractive entry point today.

The stock's poor performance recently doesn't line up with the company's trajectory. Kroger's same-store sales growth, a measure of year-over-year change in sales at stores that have been open for more than five quarters, accelerated in fiscal Q1. As people stocked up on essential items amid the coronavirus panic, many individuals turned to Kroger-owned grocery stores to do their shopping. To this end, its adjusted same-store sales surged 19% year over year in the company's first quarter of fiscal 2020. This is up from 2% growth in the fourth quarter of fiscal 2019. More importantly, the company's investments in its digital channel are paying off nicely, as digital sales soared 92% year over year -- an acceleration from 22% in the prior quarter.

But even before the COVID-19 pandemic, Kroger was notably demonstrating accelerated momentum. In fiscal 2019, full-year same-store sales accelerated for a second year in a row. In addition, the company announced an aggressive $1 billion share repurchase program in late 2019, highlighting management's bullishness for the stock. Even Warren Buffett's Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B) announced earlier this year that it had loaded up on about a half a billion dollars' worth of the grocery chain's stock -- and this was before people started flocking to Kroger's stores to panic-buy essentials. 

An attractive valuation

Highlighting the attractiveness of Kroger shares today, the stock not only has a reasonable price-to-earnings ratio of 16 but it also has a meaningful dividend yield of 2%.

For another view of the company's compelling valuation, consider that Kroger generated more than $1.5 billion of free cash flow (cash from operations less capital expenditures) in fiscal 2019, yet its market cap is just over $25 billion. This means Kroger only trades at 17 times its annual free cash flow. Even more, this annual free cash flow was up from $1.2 billion in fiscal 2018 and $604 million in fiscal 2017. 

While Kroger shares may not deliver explosive returns for investors, they at least seem like a low-risk bet that can grow modestly over the long haul while paying out a nice dividend to shareholders along the way.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.