Alimentation Couche‑Tard (TSX:ATD) has been one of Canada’s most reliable compounders for decades, but the stock faces a different set of questions heading into 2026.
For years, investors could count on double‑digit growth driven by acquisitions, scale, and operational efficiency.
More recently, that pace has slowed, and the company’s attempts to buy 7‑Eleven raised concerns about how much runway remains for mega‑deals.
Concurrently, volatility related to fuel demand and the rise of electric vehicles (EVs) has raised new concerns among investors. These shifts have led some investors to question whether Couche‑Tard still deserves its “forever stock” reputation.
With that in mind, it’s worth taking a closer look to answer that question.
Meet Couche-Tard
Couche‑Tard operates more than 17,000 stores across 29 countries under Circle K and other banners. The company generates its revenue from fuel, convenience retail, and a growing foodservice segment.
A long history of disciplined acquisitions and best‑in‑class integration has been the backbone of its growth strategy.
In short, scale, efficiency, and steady cash flow remain central to the business model.
Why investors are questioning the business
The first concern is that Couche‑Tard’s growth has slowed from its historical double‑digit pace to a more modest pace. In truth, it’s not a sign of company weakness, but rather a shift from that hyper-growth era.
The second issue is the failed $47 billion bid for 7‑Eleven, which would have created the world’s largest convenience store operator.
Had that deal succeeded, it would have come with significant regulatory and governance concerns. It would also raise questions about the appetite among regulators for similar mega-acquisitions. This mirrors other segments of the market where regulators cooled on mega‑mergers after a wave of large deals.
Regulators aren’t the only ones with that feeling. Investors remain concerned about acquisition fatigue and whether the explosive growth of the last decade can be matched.
Finally, we have fuel margin volatility. Fuel remains a major profit driver for the company, despite long‑term uncertainty around EV adoption. This adds a layer of uncertainty to an otherwise defensive business model.
These concerns explain why that “forever stock” label is being re‑examined.
Why it still looks like a forever stock
Despite those headwinds, there are still plenty of reasons to see Couche‑Tard as that long-term forever stock.
Its scale advantage is enormous, giving the company unmatched purchasing power and operational leverage across its global network. Additionally, convenience retail and fuel remain highly defensive businesses, supported by everyday purchases and essential travel needs.
In other words, Couche-Tard isn’t a destination in itself. Rather, it serves as an essential stop enroute to that destination. And that stop provides all the amenities its customers need.
That leads to the company’s Foodservice segment, which remains an underappreciated growth lever. This is especially true following the GetGo acquisition, which added higher‑quality offerings.
Turning to acquisitions, Couche-Tard’s integration track record is among the best in the industry.
The company has developed a particular knack for extracting value from bolt‑on deals and realizing those synergies. It’s also shifted toward buybacks, returning more capital to shareholders following the abandoned 7‑Eleven bid.
Finally, there’s the dividend. While modest, the 1.14% yield comes with steady dividend growth supported by strong cash flow.
Final take
Couche‑Tard may not be the hyper‑growth machine it once was, but it continues to demonstrate the qualities that define a durable compounder.
Its scale, defensiveness, disciplined capital allocation, and consistent execution give it staying power even in a changing industry.
The next decade will likely look different from the last, with slower growth and more measured expansion. But for investors comfortable with those shifts, Couche‑Tard still stands out as a strong candidate for a forever stock in any well-diversified portfolio.
It remains a business built for long‑term compounding, even if the path forward is more gradual.
