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To help investors like you navigate this historically uncertain — yet high-flying — market and prepare for an inevitable downturn, we’re re-opening our Motley Fool Pro Canada service to a select few new members for a short time.

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Can Alimentation Couche-Tard Inc. Rise Another 800%?

We all want exceptional returns. Alimentation Couche-Tard Inc.’s (TSX:ATD.B) returns make any investor drool. The company rose 819% and delivered total returns of 833% in six years! This equates to a return of 45% per year. This is four times better than the average market returns of 7-10% per year.

Can Couche-Tard continue to deliver double-digit growth? First, let’s explore how it achieved exceptionally high growth in the past few years.

How did Couche-Tard achieve high growth?

Couche-Tard has a track record of successfully integrated acquisitions. As of November 2015, Couche-Tard has integrated more than 5,400 stores from 49 acquisitions.

As of October 2015, Couche-Tard had a network of more than 8,000 convenience stores across North America, of which more than 6,500 offer road transportation fuel. In Europe, the company has more than 2,200 stores across Scandinavia, Poland, the Baltics, and Russia. Many of those stores offer road transportation fuel and convenience products.

In February, Couche-Tard acquired Topaz Energy Group, which is the leading convenience and fuel retailer in Ireland with 444 stations across the island.

Another focus of Couche-Tard is the improvement of same-store sales by catering to customer needs, focusing on key products (food, coffee, cold beverages, fuel, and car washes).

Couche-Tarde also has a disciplined culture to keep costs under control. For example, in its November presentation it stated, “For fiscal 2015, operating, selling, administrative and general expenses increased by only 0.8% compared with fiscal 2014.”

Amazing dividend growth

Some investors would pass Couche-Tard right by because of its tiny dividend yield of 0.5%. However, when looking closely, since 2010 the company has actually increased its dividend by 30.6% on average per year! Couche-Tard’s last hike at the end of 2015 was 22.7%, which was still exceptional.

Based on Couche-Tard’s quarterly dividend per share of 6.75 cents and its fiscal year 2015 earnings per share, its payout ratio is only 12.4%.

Conclusion

While Couche-Tard continued to expand and improve, it consistently recorded a return on equity (ROE) of over 20% for the past six years. In fact, in the fiscal year 2015 the convenience-store leader achieved an ROE of 24.9%.

Couche-Tard is more than an acquisition-growth story. It also looks for ways to improve its profitability, efficiency, and to keep costs under control.

Couche-Tard has already grown from a market cap of about $3.6 billion six years ago to today’s $33.1 billion. So it wouldn’t be reasonable to expect it to grow 45% per year in the next six years. However, growth in the range of 12-14% is possible.

Couche-Tard is a good growth stock; however, at about $58, it’s not cheap as it trades at 21.7 times its earnings. Prudent investors should consider buying if it dips to $45-52.

Motley Fool issues rare "double down" stock alert

Not to alarm you but you recently missed an important and rare event. Stock Advisor Canada issued a "double down"... and history suggests it pays to listen. Because 10 of the most lucrative "double downs" in one of the Motley Fool's premier services skyrocketed an average of 434%! So, simply click here to discover why Motley Fool "double downs" have some investors rocking with excitement. Five years from now, you wish you'd grabbed this stock. Click here to learn more.

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

NEW! This Stock Could Be Like Buying Amazon In 1997

For only the 5th time in over 14 years, Motley Fool co-founder David Gardner just issued a Buy Recommendation on this recent Canadian IPO.

Stock Advisor Canada’s Chief Investment Adviser, Iain Butler, also recommended this company back in March – and it’s already up a whopping 57%!

Enter your email address below to claim your copy of this brand new report, “Breakthrough IPO Receives Rare Endorsement.”

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