There are a few stocks on the market today that continue to climb higher than ever before. One of those stocks is Dollarama (TSX:DOL). Dollarama stock has recently hit all-time highs, passing the three-digit mark, and is currently trading at $104.50 as of writing.
But there are reasons that you should consider this stock, even at all-time highs. So, let’s look at the most important.
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History of resilience
When it comes to Dollarama stock, resilience hardly covers it when you talk about its history. The stock has maintained consistent share price growth, with an average return of 10% over the last decade! The company has also proven resilience even in the face of economic downturns, such as the one we’re currently experiencing.
In fact, even during the pandemic, the company managed to increase its market share. This highlights the strength of the discount retail model here in Canada, especially during times of hardship when Canadians seek out value.
But here’s the thing: it hasn’t just been hardships that cause the stock to grow. Dollarama stock has seen growth during these tough times, sure. But even during times of growth for the economy, Dollarama stock uses it to its advantage. It opens new locations for more growth, seeing consumers simply attend to buy non-essential items during these times. This makes it a strong stock, no matter the market.
Strong earnings and future
Dollarama stock also has a strong history of reporting stellar results and seeing that continue to move upwards for the remainder of the year. While we’re still waiting on fourth-quarter and full-year results, the company reported strong growth during the third quarter.
The discount retailer reported $1.48 billion in revenue, representing a 14.6% year-over-year increase. Same-store sales also grew by 11.1%, including a 10.4% increase in the number of transactions. Furthermore, earnings per share (EPS) rose by a whopping 31.4% compared to last year, surpassing estimates.
This stronger-than-expected performance led management to also raise their guidance for same-store sales growth. They now predict guidance for 2024 to be in between 11% and 12%, up from 10% to 11% previously stated.
More to come
Yet while all of this points to the company’s strong performance recently, there could be more to come. This would likely be also in the form of acquisitions. Dollarama stock has seen high success with its DollarCity investment in Latin America. And it looks like this might be replicated in Australia.
There are currently rumours the company could be purchasing a discount retailer in Australia, and with a strong history of growth this could lead to an opportunity that replicates this business model.
What’s more, expansion in Australia would likely be even easier. The market is similar to Canada and would set up the company for years of even more market growth. So, while we’re still waiting on whether management will actually go through with this, there is enough here for investors to be certain Dollarama stock will be a strong investment. Not just now but for years, even decades, to come.
