The market is full of great long-term options that can cater to different investor goals, including both income-producing and growth stocks alike. But there’s one stock where the smartest Canadian investors are investing right now.
That stock is Alimentation Couche-Tard (TSX: ATD), and here’s why the smartest Canadian investors should be considering the stock right now.
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Why top Canadian investors are buying ATD
Couche-Tard is one of the most reliable compounders on the market. For those unfamiliar with the stock, Couche-Tard is one of the largest convenience store and gas station operators on the planet.
The company’s business model is incredibly defensive. Convenience stores and gas stations generate a steady stream of revenue. That’s because, irrespective of how the market fares, people still need fuel, snacks and convenience items.
That’s an underrated advantage of Couche-Tard, and that stability is appealing in times of volatility.
Couche-Tard is also branching out into other adjacent areas and markets. They include embracing EV charging and car washes, as well as expanding into new markets. Those aren’t the core of the business yet, but they give Couche-Tard additional paths to compound value over time. That makes the stock interesting not just for where it is today, but for where it could be several years from now.
The smartest Canadian investors already know that Couche-Tard got to that position by taking an aggressive, yet disciplined approach to expansion. That’s helped the company attract investors seeking long-term value creation over short-term excitement.
That’s a key element of Couche-Tard. The company stands out for its growth focus and impressive track record for effectively integrating acquisitions. This has helped Couche-Tard to expand its global footprint to 29 countries and over 17,000 stores.
For the smartest Canadian investors who seek a stable and growing stock, Couche-Tard checks the right boxes.
Couche-Tard’s success
Couche-Tard’s long‑term success stems from its ability to grow earnings while generating strong free cash flow. Additionally, the company’s operational efficiency allows it to maintain healthy margins even in challenging environments.
That efficiency, combined with its global footprint, gives Couche-Tard a competitive edge that few companies can match.
Another major draw is the company’s capital allocation strategy. Couche-Tard has a strong history of deploying capital where it earns the highest returns. That includes acquisitions, organic growth, and even share buybacks.
This has helped Couche-Tard deliver consistent value to shareholders over time. As of the time of writing, Couche-Tard has realized returns of 12% over the trailing 12-month period and 80% over the past five years.
Investors should also note that Couche-Tard pays out a quarterly dividend. As of the time of writing, the dividend yield works out to 1.05%, which isn’t going to provide a huge income, but it could contribute to compounding when reinvested over longer periods of time.
Where are the smartest Canadian investors investing?
It’s easy to see why large investors like Couche-Tard. The company combines steady cash generation, global scale, and a proven ability to allocate capital well. That tends to attract the smartest Canadian investors.
No stock is without risk, and that includes an otherwise defensive holding like Couche-Tard. Fortunately, Couche-Tard’s diversified business and strong growth help minimize that risk.
In my opinion, Couche-Tard is a stellar long-term growth stock that deserves a place in a well-diversified portfolio.
