Canadian Tire Corporation Limited (TSX:CTC.A), one of Canada’s largest retailers of general merchandise, automotive products, sporting goods, and apparel, announced strong third-quarter earnings results, a dividend increase, and a share-repurchase authorization before the market opened on November 12, and its stock responded by rising over 2% in the day’s trading session.

The stock still sits more than 15% below its 52-week high of $137.48 reached back in April, so let’s take a closer look at the results and the fundamentals of its stock to determine if this could be the start of a sustained rally higher and if we should buy the stock today.

The results that enabled the move higher

Here’s a summary of Canadian Tire’s third-quarter earnings results compared with what analysts had expected and its results in the same period a year ago.

Metric Q3 2015 Actual Q3 2015 Expected Q3 2014 Actual
Earnings Per Share $2.62 $2.00 $2.17
Revenue $3.13 billion $3.15 billion $3.07 billion

Source: Financial Times

Canadian Tire’s diluted earnings per share increased 20.5% and its revenue increased 1.9% compared with the third quarter of fiscal 2014. Its double-digit percentage increase in earnings per share can be attributed to its net income increasing 23.4% to $219.9 million, which was helped by a $25.4 million gain on the sale or surplus property, but was partially offset by a $13.8 million reduction as a result of its sale of 20% of its Financial Services business in the fourth quarter of fiscal 2014.

Its slight revenue growth can be attributed to its revenues increasing in two of its three major segments, including 2% growth to $2.83 billion in its Retail segment and 7.1% growth to $95.9 million in its CT REIT segment, and this was only partially offset by its revenues decreasing 0.7% to $275.5 million in its Financial Services segment. It is also worth noting that excluding petroleum sales, Canadian Tire’s consolidated revenue increased 5.3%.

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

  1. Same-store sales increased 3.4% at Canadian Tire, 7% at FGL Sports, and 8.5% at Sport Chek, and decreased 0.2% at Mark’s
  2. Gross profit increased 4% to $1.02 billion
  3. Gross margin expanded 60 basis points to 32.7%
  4. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 18% to $415.1 million
  5. Adjusted EBITDA margin expanded 180 basis points to 13.3%
  6. Cash generated from operating activities before specific items increased 41.4% to $335 million

Canadian Tire also made two important announcements. First, it announced a 9.5% increase to its quarterly dividend to $0.575 per share, and the next payment will come on March 1 to shareholders of record at the close of business on January 31. Second, it announced that its board of directors approved a plan to repurchase $550 million worth of its class A non-voting shares by the end of 2016.

Can the rally continue and should you be a long-term buyer?

It was an outstanding quarter overall for Canadian Tire, so I think its stock responded correctly by moving higher. I also think this could be the start of a sustained rally higher and that the stock represents a very attractive long-term investment opportunity today.

First, Canadian Tire’s stock still trades at just 14.9 times fiscal 2015’s estimated earnings per share of $7.78 and only 13.6 times fiscal 2016’s estimated earnings per share of $8.51, both of which are inexpensive compared with its trailing 12-month price-to-earnings multiple of 15.2 and the industry average multiple of 31.3.

Second, Canadian Tire now pays an annual dividend of $2.30 per share, giving its stock a 1.8% yield. This yield may not seem like much at first, but it is very important for investors to note that it has raised its dividend for five consecutive years, and the increase it just announced puts it on pace for 2016 to mark the sixth consecutive year with an increase, making it one of the top dividend-growth plays in the retail industry.

Third, Canadian Tire has been repurchasing its class A non-voting shares, including 2.6 million shares for a total cost of $290.6 million in fiscal 2014 and 2.54 million shares for a total cost of $322.3 million in the first 39 weeks of fiscal 2015, and it plans to repurchase another $550 million worth of its shares by the end of 2016. These repurchases will boost the company’s earnings-per-share growth going forward and make its remaining shares more valuable.

With all of the information provided above in mind, I think all Foolish investors should strongly consider beginning to scale in to long-term positions in Canadian Tire today.

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Fool contributor Joseph Solitro has no position in any stocks mentioned.