Yahoo Finance This Growth Stock Has Market-Beating Potential
Written by Demetris Afxentiou at The Motley Fool Canada
There’s no shortage of great growth stocks on the market to consider right now. Some of those growth stocks offer serious marketing-beating potential.
One such growth stock is Alimentation Couche Tard (TSX:ATD) and here’s why this growth stock belongs in your portfolio right now.
Meet Alimentation Couche Tard
When was the last time you stopped at a gas station or convenience store and thought it would be a great growth pick? The passive nature of those retail operations leads investors to be dismissive of that huge, unlocked potential.
Alimentation Couche Tard is one of the largest convenience store and gas station operators on the planet. The company blankets the planet, with over 14,000 locations in over a dozen countries. But that’s not reason enough to class Couche Tard as a growth stock with market-beating potential.
For that, we need to look a little deeper.
Couche Tard has taken an aggressive stance on growth. In fact, Couche Tard has made increasingly larger acquisitions over the years, reaching into new markets as well as expanding into complementary services.
Two recent examples of that expansion include Couche-Tard’s foray into the car wash business and its ongoing EV network buildout.
More recently, the company announced earlier this month that it completed the acquisition of the retail assets of Europe-based TotalEnergies. Specifically, the deal includes all retail assets in Germany and the Netherlands, as well as 60% interest in assets located in Belgium and Luxembourg. In total, Couche Tard acquired interest in 2,175 sites from that deal.
As a result of that impressive growth, Couche-Tard has managed to keep its CAGR (Compound Annual Growth Rate) in double-digit territory for the past decade.
As of the time of writing, Couche-Tard is up nearly 30% over the trailing 12-month period. This puts the growth stock into a good position with its market-beating potential.
Despite the already impressive gains, there’s still room for Couche-Tard to rise further.
Why Couche-Tard is a great growth stock
There isn’t a single reason why investors should flock to this market-beating growth stock. Instead, there’s a basket of reasons why.
First, we have the defensive appeal of the stock. Gas stations and convenience stores are highly defensive businesses. Arguably, they are both necessities too, and this means they can continue to provide a healthy recurring revenue stream for Couche-Tard.
Speaking of defensive appeal, I would be remiss if I didn’t mention both the geographical diversification of Couche-Tard’s business as well as its transition into serving EV customers. The first major milestone in that expansion is the company’s 200-location charging network, which is targeted for this year.
Next, we have the insane approach to expansion. Couche-Tard’s acquisition of the retail assets of TotalEnergies is just the latest drop in the bucket. In fact, prospective investors will be shocked to realize the company opened its first convenience store just over 40 years ago in Quebec.
Finally, let’s talk dividends. Yes, this market-beating growth stock does offers investors a dividend, albeit a small one. As of the time of writing, Couche-Tard offers a quarterly dividend, paying out a yield of 0.73%.
That’s hardly enough to retire on, but it is reliable and like all things Couche-Tard, it’s growing.
In my opinion, Couche-Tard is an excellent growth stock for investors looking for a market-beating long-term option.
Buy it, hold it, and watch it grow.
The post This Growth Stock Has Market-Beating Potential appeared first on The Motley Fool Canada.
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Fool contributor Demetris Afxentiou has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alimentation Couche-Tard. The Motley Fool has a disclosure policy.
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