Alimentation Couche-Tard Inc. (TSX:ATD.B), one of world’s largest operators of convenience stores and gas stations, announced better-than-expected first-quarter earnings results before the market opened on September 1. Its stock responded by rising over 1.5% in the day’s trading session, which is very impressive given the fact that the TSX fell over 2.5%.

Let’s take a closer look at the results to determine if this could be the start of a sustained rally higher and if we should consider initiating positions today.

The results that enabled the rally

Here’s a summary of Couche-Tard’s first-quarter earnings results compared with what analysts had expected and its results in the same period a year ago. All figures are in U.S. dollars.

Metric Q1 2016 Actual Q1 2016 Expected Q1 2015 Actual
Adjusted Earnings Per Share $0.53 $0.46 $0.48
Revenue $8.98 billion $8.82 billion $9.19 billion

Source: Financial Times

Couche-Tard’s adjusted earnings per share increased 10.4% and its revenue decreased 2.3% compared with the first quarter of fiscal 2015. The company noted that its double-digit percentage increase in earnings per share could be attributed to its adjusted net income increasing 8.3% to $299 million, driven by its acquisition of The Pantry Inc., which was completed in March, strong organic growth in its merchandise and services segment, and “rigorous cost control.”

It also noted that its slight decline in revenue could be attributed to lower fuel prices, the negative impact of currency translation from its Canadian and European operations into U.S. dollars, and the sale of its aviation fuel business in the third quarter of fiscal 2015.

Here’s a quick breakdown of eight other notable statistics from the report compared with the year-ago period:

  1. Total road transportation fuel revenues decreased 3.6% to $6.37 billion
  2. Total merchandise and service revenues increased 22.8% to $2.44 billion
  3. Same-store road transportation fuel volumes increased 9.4% in the United States, 1.4% in Canada, and 2.7% in Europe
  4. Same-store merchandise revenues increased 5.1% in the United States, 2.3% in Canada, and 1.3% in Europe
  5. Gross profit increased 10.9% to $1.42 billion
  6. Adjusted earnings before interest, taxes, depreciation, and amortization increased 10.2% to $546.6 million
  7. Operating profit increased 11.7% to $408.1 million
  8. Net cash provided by operating activities increased 13.9% to $400.1 million

Couche-Tard also announced that it will be maintaining its quarterly dividend of CA$0.055 per share, and the next payment will come on September 25 to shareholders of record at the close of business on September 11.

Should you buy Couche-Tard today?

It was a great quarter overall for Couche-Tard, and the results surpassed analysts’ expectations, so I think its stock responded correctly by moving higher. I also think this could be the start of a sustained rally higher.

First, Couche-Tard’s stock trades at 29.8 times fiscal 2016’s estimated earnings per share of $1.90 and 25.1 times fiscal 2017’s estimated earnings per share of $2.26, both of which are inexpensive compared with its long-term growth potential and the latter of which is inexpensive compared with the industry average multiple of 28.6.

Second, I think the price of oil will head higher over the next 12 months, which will result in higher fuel prices, and this will lead to higher sales and overall profitability for Couche-Tard. The increased profitability would also lead to higher earnings estimates for the company, which would make its stock’s forward valuations even more attractive.

In addition, Couche-Tard pays an annual dividend of $0.22 per share, giving its stock a yield of approximately 0.4% at today’s levels. A 0.4% yield is far from impressive, but it is very important to note that the company has increased its annual dividend payment for five consecutive years, and its consistent free cash flow generation and low payout ratio could allow this streak to continue for the next several years.

With all of the information above in mind, I think Alimentation Couche-Tard represents one of the best investment opportunities in the convenience store industry today. Foolish investors should consider beginning to scale in to long-term positions over the next couple of weeks.

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Fool contributor Joseph Solitro has no position in any stocks mentioned. Alimentation Couche-Tard is a recommendation of Stock Advisor Canada.