The Canadian stock market is hot, and it does not seem like it will be slowing down any time soon. As of this writing, the S&P/TSX Composite Index is up by 27% from its 52-week low levels. The strength of the Canadian benchmark index is indicative of the overall strength of the Canadian stock market. Despite hitting new all-time highs regularly over several weeks, the stock market is still volatile.
In volatile market conditions, many savvier investors rely on dividend investing for returns to offset potential losses. When investing in dividend stocks, many investors chase high-yielding equity securities to try to maximize their return on investment. However, Foolish investors understand that a stable and reliable payout from a stock with a solid underlying business can be far better.
This is where Alimentation Couche-Tard (TSX:ATD) stands apart from most publicly-traded companies on the TSX. Investing in a boring retail stock might not seem very exciting, but this convenience store giant might be the perfect investment for dividend-seeking investors with a long-term strategy.
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Alimentation Couche-Tard
Couche-Tard is a $68.91 billion market capitalization Canadian multinational operator of convenience stores, boasting almost 17,000 locations across Canada and several international markets. A company with a massive presence in the domestic and international market, the company has been busy.
Couche-Tard was set to acquire Seven & I Holdings, but has walked away from the deal for other pursuits. The company is now focusing on using the cash it set aside for the deal to push for more share buybacks and improve its performance on the stock market.
The company’s full fiscal 2025 report was published not too long ago, and it painted a clearer picture for its investors. The company reported US$72.9 billion in revenue for fiscal 2025, up by around 5.2% from last year. Its quarterly revenue for the fourth quarter (Q4) of 2025 declined by 7.5%, weakened by lower fuel prices and softer demand south of the border in the U.S.
Despite that, the company’s adjusted earnings only showed insignificant declines, reflecting the resilience of the business. Despite all the headwinds, Alimentation Couche-Tard recently raised its dividends by 14.3%. As of this writing, ATD stock trades for $72.68 per share and boasts a 1.07% dividend yield. While it is not a high-yielding payout, it is one of the most reliable quarterly payouts you can get, backed by a solid business.
Foolish takeaway
ATD has a growing presence in the domestic and several international markets. It might not offer the highest-yielding dividends, but it offers consistency. The business is solid, and it has plenty of growth potential. At current levels, the stock is up by 10.2% from its 52-week low but still trades at a 15.02% discount from its 52-week high.
It has steady cash flows and strong earnings, and many might consider the decision to walk away from the acquisition a smart move. The company doesn’t need to take unnecessary risks. It just needs to continue doing what it does and weather the storm to emerge stronger on the other side.
ATD stock can be a good investment for those seeking reliable dividends and solid long-term growth potential.
