Among the companies I’ve been pounding the table on of late is Alimentation Couche-Tard (TSX:ATD.B). Indeed, Couche-Tard stock has been one of the undervalued stocks that I think continues to look attractive at these levels.
Since the beginning of the year, Couche-Tard stock has been on a nice run. This company has seen capital appreciation of around 15%, along with a rather juicy dividend the company continues to pay out. Accordingly, investors seeking total returns have a high-quality gem trading at attractive levels to consider right now.
Here’s more on why I think Couche-Tard stock is worth a look right now.
Couche-Tard stock benefits from disciplined management team
Alimentation Couche-Tard is one of the leading convenience store operators and fuel retailers in Canada. This company operates in various countries all around the world, including Russia, Ireland, North America and Poland. As of today, Couche-Tard has over 14,200 stores worldwide that are either owned or affiliated.
This company has always followed a disciplined acquisition strategy over the years. Indeed, Couche-Tard stock has benefited from a prudent M&A strategy over the years, which has seen this company produce incredible growth over time.
Of course, ESG-related concerns and slower M&A activity have put investors on pause of late. However, I think Couche-Tard is simply being patient with its deal flow and is managing risk. That’s good for long-term investors.
The Laval-based company has established a coast-to-coast presence across North America. Moreover, it has extended its market share in different European markets. Indeed, Couche-Tard stock has showcased tremendous growth over the long term. And, as per Couche-Tard’s projections, more upside is on the horizon, as this company plans to double its EPS over the upcoming five years.
The reopening thesis still stands strong
Couche-Tard’s operations were severely impacted by the pandemic. Gasoline sales took a hit, as did the company’s convenience store sales. Accordingly, this company had to incur significant losses. And Couche-Tard stock was not immune from the selling in this sector.
However, over the past six months, Couche-Tard stock has managed to deliver impressive performance. Indeed, shares of this company have posted roughly 20% returns during this timeframe. Accordingly, as we inch closer towards the end of the pandemic, there appears to be plenty of upside for Couche-Tard.
At the time of writing, shares of this company trade at approximately 16 times its earnings. Without a doubt, this stock is attractive for value investors at these levels. At the same time, this stock has a dividend yield of 0.7%. In my view, this company can offer a higher yield for investors who can power through the slow growth in the near term.