Look, I get it. We all want to be that one person someone is giving a valuable stock tip to at the watercooler at work: “Oh, did you hear? They bought it back when it was like $5. And now it’s $500 per share!” That’d be great! It’d also be great to win the lottery, and that’s basically the same as finding a Canadian stock and buying it at $5, then seeing it balloon overnight.
That’s why when it comes to true investing, investors need to think long-term. And there’s nothing like looking backwards to find something that truly looks like a future favourite. That’s why, today, we’re going to discuss the immense positives that are still in place for Dollarama (TSX:DOL).
Looking back
In 2015, Dollarama stock traded at about $30 per share. Today, that share price has ballooned to about $190 as of writing. That’s an increase of 533%! And there’s no reason why this top retail stock can’t do it again.
Why? Because the company isn’t just steady or stable, it’s growing. Dollarama stock recently came out with second-quarter earnings for 2026, and they were remarkable. Sales increased 10.3% to $1.7 billion for the quarter, with a 12.4% rise in net earnings, hitting $321.5 million. Furthermore, diluted earnings per share (EPS) hit $1.16, rising by 13.7%.
What’s more, Dollarama is still being fiscally responsible. Selling, general and administrative expenses (SG&A) rose by 13.3%, but this was due to its recent international expansion and acquisition costs. So while that impacted operating margins, it’s not a long-term issue.
More to come
So let’s get into that international expansion, shall we? Dollarama has already expanded on a global scale with its acquisition of Dollarcity in Latin America. But after the major success of Dollarcity, Dollarama is now going across the Ocean, acquiring Australia’s largest discount retailer, the Reject Shop. This added another 395 stores, marking a huge step towards further international expansion.
And don’t think it’s sitting back on what it already holds. Dollarcity just opened its first store in Mexico, boosting its presence. The company also opened even more locations at home, hoping to achieve 2,200 locations by 2034. It’s already well on the way. Back in 2015, it reached 1,000 locations. Today, the company has about 1,600. What’s more, this expansion is supported by a $450 million logistics hub in Calgary.
Considerations
Another reason to consider the stock? Dollarama stock just upped its dividend by a whopping 15%. The quarterly dividend now comes to $0.1058 per share, bringing it to $0.42 per share. Not huge, certainly. But what you miss in dividends, you’re still gaining in growth. Plus, there’s already a plan to repurchase 5% of common shares, demonstrating further future confidence in financial health and growth.
The downside? Dollarama does have a lot of debt on hand from all this expanding, at $5.6 billion. Plus, its debt-to-equity (D/E) ratio is at 381%, which is not ideal. So now, Canadian investors will need to see how the company integrates and optimizes its Australian arm, improving efficiency and profitability.
Bottom line
All considered, this isn’t a short-term stock ready to blow up. It has already done that. Instead, investors looking towards the future will certainly want to ride Dollarama stock even further to the top. It’s not a wave; it’s a smooth and winding river, providing you with plenty of opportunities along your path to financial freedom.
