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.
