The best thing about long-term investing is that you don’t need to be glued to a stock chart every day. If you own the right businesses, time does most of the work for you. That’s especially true when it comes to retail. Canadian retail stocks could be solid long-term holdings because they benefit directly from everyday consumer activity.
What makes some retail stocks even more attractive is their ability to return capital to shareholders through dividends. A consistent yield reflects financial strength and long-term confidence in a stock’s cash flow. When you combine that with expansion-driven growth, the overall investment story looks even stronger.
Let’s take a closer look at one such Canadian retail stock that not only yields 3.8% but continues to expand its footprint, making it an attractive option for long-term income investors.
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A top Canadian retail stock with dividends
So, if you’re looking for a Canadian retail stock that pays dividends and keeps expanding, Canadian Tire (TSX:CTC.A) is worth watching. With over a century of presence, it’s a household name in Canada. The Toronto-headquartered diversified company operates across various segments, including general merchandise, auto, apparel, and financial services.
After rallying 37% over the last year, Canadian Tire stock currently trades at $188.76 per share with a market cap of $10.5 billion. For long-term income seekers, the stock offers an annualized dividend yield of 3.8%, which is mainly backed by its strong operational results and stable cash flows.
The recent rally in this retail stock has partly been fueled by the company’s turnaround efforts. With a multi-year “True North” plan, Canadian Tire is focusing on revamping stores, expanding its loyalty platform, and restructuring the business. Moreover, its recent strategic decisions, like exiting the Helly Hansen business and acquiring the Hudson’s Bay brand assets, have also improved the company’s growth outlook.
Signs of improving profitability
In the first quarter of 2025, Canadian Tire saw retail revenue rise 4% YoY (year over year), while its consolidated comparable sales jumped 4.7%. The company’s retail sales grew across all major banners, with SportChek up 6.3%, Canadian Tire retail up 4.7%, and Mark’s up 2.2% from a year ago. Outdoor and seasonal items, hockey gear, and industrial wear were top-selling categories.
Even though restructuring costs affected its net profit before tax last quarter, the company actually saw a big leap in profitability as its core earnings came in at $2.00 per share, up from $1.08 per share a year ago.
Investing in the future
That takes us to what makes this stock even more compelling. Canadian Tire is investing more than $2 billion over four years through its True North strategy. It has already announced over 30 Canadian Tire store upgrades and 18 Mark’s store projects for 2025.
Its recent move to acquire Hudson’s Bay Company’s brand assets, including the iconic HBC stripes, added another layer of brand strength. Besides these growth efforts, Canadian Tire’s robust loyalty network, which now includes new partnerships with Royal Bank of Canada and WestJet (expected to roll out in 2026), makes it a top retail stock that could thrive for years to come.
