1 Dividend-Growth Giant I’d Buy on Any Pullback

Some stocks are worth waiting for, and Alimentation Couche-Tard (TSX:ATD) is one of them. The convenience-store giant rarely looks cheap, and that’s true today. Shares surged after earnings with the stock up about 37% in the last year alone. But if the stock pulls back, I’d put it near the top of a long-term buy list.

This is a dividend-growth giant with a much bigger story than its current yield suggests. ATD stock pays a modest quarterly dividend, recently $0.22 per share working out to $0.86 annually for a yield at 0.92%. But Couche-Tard is not trying to be a high-yield income stock. It’s a compounding machine that uses cash flow to acquire stores, improve operations, buy back shares, invest in food and loyalty programs, and raise the dividend along the way.

ATD

ATD stock operates convenience stores and fuel stations under banners such as Circle K and Couche-Tard. It has a huge global footprint, with close to 17,300 stores across 29 countries and territories. About 13,200 of those locations offer road transportation fuel.

That scale gives the company serious advantages. It can negotiate with suppliers, spread technology investments across a huge network, improve merchandising, optimize fuel margins, and acquire smaller operators. Convenience retail may not sound exciting, but it can be highly cash-generative when managed well.

Into earnings

The latest results show why the stock deserves attention. In the third quarter of fiscal 2026, gross profit rose 12.5% to US$4.2 billion. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) climbed 14.7%. Adjusted diluted earnings per share (EPS) rose 19.1% from last year. That’s strong growth from a company many investors may think of as mature.

Fuel remains important, but the longer-term opportunity is inside the store. ATD stock continues to push food service, private label, packaged beverages, loyalty, and data-driven merchandising. Its same-store merchandise revenue grew in the United States, Canada, and Europe and other regions during the first three quarters of fiscal 2026.

The company’s long-term plan also gives investors something concrete to watch. From the end of fiscal 2026 to fiscal 2030, management aims for adjusted EBITDA growth of 6% to 8% annually and adjusted diluted EPS growth of 10% or more. Those are ambitious targets for a business of this size.

Looking ahead

This is why I’d buy it on any pullback. ATD stock has several ways to win. It can grow organically through better stores and food offerings, acquire smaller players, improve costs, return cash to shareholders, and keep raising the dividend from a low payout base.

The risk is that ATD stock often reflects that quality. Shares don’t always trade at a bargain valuation. If investors pay too much, returns can lag even when the business performs well. A market pullback, weaker fuel sentiment, or short-term pressure on consumer spending could create a better entry point.

There are also structural risks. Electric vehicles could pressure fuel traffic over time, even if that shift plays out slowly. Labour costs, rent, wages, tobacco weakness, regulation, and integration risk from acquisitions can also affect results. Convenience retail is steady, but not risk-free.

Bottom line

Still, ATD stock has spent years proving it can adapt. It has grown through different economic cycles, different fuel markets, and different consumer environments. That track record is worth something.

For dividend-growth investors, the appeal is clear. The starting yield is low, but the business has the cash flow, scale, and discipline to keep growing the payout over time. Investors buying on weakness aren’t just buying today’s dividend. They’re buying a company that could be much larger by 2030. And even now, the dividend can bring in ample income from even a $7,000 investment.

That’s why ATD stock is one dividend-growth giant I’d buy on any pullback. The stock may not look thrilling at first glance, but long-term compounders rarely need to shout.