Retail might seem like a counter-intuitive option given the shift to e-commerce during the COVID-19 pandemic. Nevertheless, many brick-and-mortar chains have adapted due to robust digital presence and delivery options. Therefore, there are some retail stocks that you shouldn’t ignore on the Toronto Stock Exchange.
In fact, there are some Canadian retail stocks that are top performers this year. They are gaining market share and increasing sales, despite the ongoing health crisis. Some are even increasing their dividend payments to shareholders.
That being said, if you are looking for some top stocks to buy before the year ends, retail might be a good industry to research, even if it doesn’t seem like the obvious choice. Looking for top retail stocks that are successfully expanding contactless delivery and online purchasing options isn’t difficult. Here are two top TSX retail stocks to consider buying in December.
Dollarama increased its stock’s dividend by 6.8%
Dollarama (TSX:DOL) rose from a 52-week low of $34.70 to a 52-week high of $55.45 after the March 2020 market sell-off. On Friday, the stock is trading for $54.46 per share. The dividend yield is low at 0.35% annually, but the company did just announce an increase in its dividend payout.
The company and its stock have been performing very well this year. President and CEO Neil Rossy commented on the strong growth in sales at Dollarama in its Q3 fiscal year 2021 earnings release on December 9:
“We are very pleased with our strong performance in the third quarter of fiscal 2021, highlighted by a double-digit increase in sales, robust same-store sales growth and an industry-leading gross margin. Our strong financial and operating results reflect the relevance of our compelling and affordable everyday products, the convenience we offer Canadian consumers from coast to coast, and our disciplined execution in maintaining well-stocked stores.”
Dollarama’s sales increased by 12.3% to $1.064 billion versus the same quarter last year. Even better: the company increased its quarterly cash dividend by 6.8% to $0.047 per common share. While the dividend yield is still low at its current share price, the boost in dividend is sure to make shareholders in its stock happy.
North West Company announces an increase in market share
North West Company (TSX:NWC) rose from a 52-week low of $16.06 to a 52-week high of $36.92 after the March 2020 market sell-off. As of Friday, the stock is trading for $35.02 per share. The dividend yield is pretty enticing at 4.04% annually.
North West is a food retailer, servicing mostly Canadian rural communities and urban neighborhood markets. The company also has stores in Alaska, the South Pacific, and the Caribbean.
Like Dollarama, North West has also seen its sales grow, despite the COVID-19 pandemic. The price of the firm’s stock has also been rising this year. North West announced Q3 results on December 9. President and CEO Edward Kennedy expressed pride with the firm’s sales growth despite the COVID-19 pandemic:
“Our sales gains show the strength of an everyday needs offering and an exceptional ability to sustain our business within difficult operating conditions, without serious disruption. These are the main reasons we have increased market shares across all of our
store banners and regions.”
North West gained market share during the quarter, leading to a sales increase of 6.4% to $553.0 million. The higher sales translated into an increase in gross profit of 9.3%. It is no wonder that the stock price is performing so well this year.
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. 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, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Debra Ray has no position in any of the stocks mentioned.