Imperial Capital has announced that they are initiating coverage on food and drug retailer, Safeway Inc.(SWY) Thursday.

The firm has initiated coverage of SWY with the rating of “Outperform,” and has given the company a price target of $23. This price suggests a 28% increase over the stock’s current price of $16.49, and a 6% increase from the stock’s YTD price of $21.51.

An analyst from the firm commented, “We think the stock will trade up on anticipated improving financial performance and potential value creation in early 2013 while providing investors with an attractive dividend yield of 4.28%.”

Safeway shares were up 19 cents, or 1.16% Thursday afternoon.

The Bottom Line
Shares of Safeway (SWY) have a 4.29% dividend yield, based on last night’s closing stock price of $16.33. The stock has technical support in the $14-$15 price area. If the shares can firm up, we see overhead resistance around the $18-$19 price levels.

Safeway Inc.(SWY) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.1 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.