Unlike income stocks, finding that perfect high-growth pick for your portfolio can seem a little overwhelming at times. There’s (usually) no dividend to fall back on, and knowing when to take profits (if ever) can mean the ultimate difference for your portfolio.
So, where to begin? Fortunately, the market gives us plenty of options to consider. Here are some stellar growth stocks to consider adding to your portfolio.
I’ll take a tank of gas, milk, and some long-term growth
When was the last time you filled up the car and bought something from the convenience kiosk by the pumps? Some of the best investments on the market are those that we engage with daily. These everyday stocks provide a service to us that we often take for granted.
That’s just one reason why you should consider Alimentation Couche-Tard (TSX: ATD).
For those unfamiliar with Couche-Tard, the Quebec-based company is one of the largest gas station and convenience store operators on the planet. The company has over 14,000 stores across 26 countries, making it a true global force.
To put the sheer size and potential of Couche-Tard as a high-growth pick into perspective, the company sells approximately 35 gallons of fuel and 750,000 cups of coffee each day.
That impressive global footprint comes thanks to the aggressive approach Couche-Tard has taken towards expansion. Specifically, Couche-Tard has completed 64 different acquisitions since 2004.
Those acquisitions have opened up new markets and products for the company. More importantly, the synergies realized from those acquisitions have helped Couche-Tard to maintain its status as a superb high-growth pick. The company’s growing network also makes it an intriguing defensive buy as well.
A recent example of this is the acquisition of 21 New Mexico-based Pic Quik stores. Couche-Tard also recently acquired 17 convenience stores in Louisiana and 23 wholesale fuel accounts spread across three states. Both transactions were completed last month.
What about earnings?
In terms of results, Couche-Tard last reported results for the second quarter at the end of November. During that quarter, the company earned US$694.8 million, or US$0.65 per diluted share. This represents a dip over the US$757 million, or US$0.68 per diluted share, reported in the same period last year.
Regardless of the dip, which was impacted by the ongoing pandemic, rising fuel costs, and exchange rates, the company continues to see strong growth. During the quarter, Couche-Tard added 36 new locations to its growing network. The company also saw merchandise and service revenue top US$4.0 billion, representing a solid 5.8% increase over the prior period.
Speaking of increases, Couche-Tard also announced an impressive 25.7% increase to its quarterly dividend, which now comes in at $0.11 per share. Despite the increase, Couche should still be perceived as a high-growth pick. Even with the latest increase, the yield on Couche-Tard’s dividend still comes in at a paltry 0.88%.
Should you buy?
Couche-Tard is an excellent long-term pick for those investors looking for a high-growth stock. The company has taken an aggressive stance to expansion in recent years, with no signs of slowing.
Further to this, investors should note that the gas/convenience store market is largely made up of local and regional players. This puts Couche-Tard with its massive network and financial muscle in a prime position to keep up that growth.
In short, buy this high-growth pick and hold it for a decade or more. Couche-Tard is great as part of a larger, well-diversified portfolio.
