1 TSX Stock up 20% That Doesn’t Show Signs of Slowing Down

This TSX stock doesn’t show any signs of slowing, nor should it, with value and dividends on top of all this growth in the last year.

| More on:
potted green plant grows up in arrow shape

Image source: Getty Images

There aren’t many TSX stocks out there that are actually doing well during this market. Yet one that’s already up 20% since the beginning of 2023 is Canadian Tire (TSX:CTC.A). The TSX stock is already up in the double digits and doesn’t show signs of slowing down. What’s going on with the company right now, and should investors jump on the climb?

Why CTC stock is up

Let’s first look at why CTC stock is on this growing upward trend in the first place. For that, we’ll have to look back a bit. CTC stock has been doing well for a while now, with the TSX stock actually seeing a fair amount of growth, even during the pandemic.

Was it an essential provider? Not really. In fact, not at all. That is why the company surprised everyone by seeing an immense amount of growth in its e-commerce arm. The reason for this is while other companies had to deal with supply-chain demand issues, CTC stock has storage on location. So, there was never a slowdown in the need for products.

What’s more, CTC stock continues to do well because of the brands it offers. In-house brands include cheaper products that are beneficial for consumers during a downturn, such as the one we’re experiencing. Even in a recession environment, CTC stock will likely continue to be chosen ahead of other pricier options.

Proof is in earnings

Not only did the TSX stock report strong earnings, but actually had some record-setting performance during the fourth quarter. It achieved a record $9.09 diluted earnings per share (EPS). Full-year 2022 sales were up 2.7%, and sales remained stable with 2021 levels for the fourth quarter.

The thing is, the company believes there is even more growth in the future. This comes from the TSX stock seeing more and more growth in its Triangle program.

“Our Triangle Membership delivered outsized growth over the year and continues to provide us with the rich first party data needed to offer personalized experiences and ultimately drive spend…In 2023, we will continue to focus on delivering value to our customers through the unique capabilities of our Owned Brands, multi-category assortment, and Triangle Rewards.”

Greg Hicks, president and chief executive officer, Canadian Tire Corporation

Should you buy?

Now, all this good news and growth doesn’t necessarily mean the TSX stock is valuable at these levels. Let’s look at the company’s fundamentals and historic growth to see whether investors should consider CTC stock on the TSX today.

CTC stock trades at 9.61 times earnings as of writing, putting it in value territory. It also trades at 1.72 times book value. And while shares are up this month or so, they’re still down 5.6% in the last year alone. So, in that sense, it absolutely is a valuable buy.

What’s more, the TSX stock is up 213% in the last decade. That’s a compound annual growth rate of 12.07%! Finally, you have the $6.90, or 4.08% yield, dividend to consider on top of all this.

Bottom line

CTC stock is one of the best companies you can buy for dividends and growth right now. The TSX stock may be up, but still has more room to climb to reach former 52-week highs. So, pick up this valuable stock for dividends and growth in the next year and beyond.

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 Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Stocks for Beginners

Dividend Stocks

5 Steps to Making $500 in Monthly Passive Income in 2023

Generating monthly passive income isn't as hard as it sounds. Here are 5 steps to start making $500 every month.

Read more »

Various Canadian dollars in gray pants pocket
Stocks for Beginners

3 Passive-Income Ideas to Build Long-Term Wealth

Set up to earn multiple passive-income streams to complement your active income. Dividend stocks are an excellent way to start.

Read more »

woman data analyze
Stocks for Beginners

Got $1,000? 3 Places to Invest for March 2023

New investors should regularly save and invest according to their risk tolerance and financial goals. Here are three places to…

Read more »

Young adult woman walking up the stairs with sun sport background
Stocks for Beginners

Debt-Riddled Canadians: 4 Steps to Manage Your Finances and Grow Your Portfolio

There are so many Canadians drowning in debt. Follow these steps, and you could get out of it before you…

Read more »

Man holding magnifying glass over a document
Stocks for Beginners

TFSA Investors: Make Your Recession Watchlist Now!

These long-term stocks offer immense value for TFSA investors looking to create immense returns coming out of a recession.

Read more »

tsx today
Stocks for Beginners

TSX Today: What to Watch for in Stocks on Thursday, March 23

TSX stocks may remain volatile, as investors continue to assess how the high interest rate environment could affect the economy…

Read more »

A plant grows from coins.
Dividend Stocks

2 Young TSX Stocks You’ll Be Glad You Bought in 10 Years

Youth means nothing when you plan to hold strong companies long term. These two TSX stocks should therefore be first…

Read more »

Financial technology concept.
Dividend Stocks

2 TSX Value Stocks to Buy for Peace of Mind (and a Crazy-Good Deal)

2 TSX stocks that could outperform in the long term.

Read more »