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Highlights
- Canadian Tire Corporation (TSX: CTC.A) has announced an increase of 25 per cent in its dividend.
- The company saw growth across retail, financial services and REIT segment.
- Canadian Tire’s retail sales saw a year-over-year (YoY) surge of C$ 303.6 million.
Beginners, you might be interested in this retail stock! Canadian Tire Corporation Limited (TSX: CTC.A) has announced that it is hiking its quarterly dividend by 25 per cent.
Also read: Canadian Tire (CTC.A) & Pet Valu (PET): Are these stocks worth buying?
Canadian Tire President and CEO Greg Hicks has said that the multi-assortment category across its banners continued to drive its sales surge in the first quarter of 2022. He added that the company saw growth across retail, financial services and REIT segment.
Let us discuss Canadian Tire in detail and evaluate if it is the right time to buy this stock, especially if you are a newbie in stock trading.
Canadian Tire Corporation (TSX: CTC.A) financial highlights of Q1 FY2022
Firstly, the company’s new quarterly dividend of C$ 1.625 is set to be paid on September 1. On the financial side, Canadian Tire Corporation saw its retail sales catapult by C$ 303.6 million year-over-year (YoY) to C$ 3.42 billion in Q1 FY2021.
The large-cap company reported a jump of 6.4 per cent YoY in its consolidated comparable sales (petroleum excluded) in the latest quarter. The retail giant also recorded revenue of C$ 3.83 billion in the first three months of 2022, noting a YoY surge of C$ 514.5 million. When excluding petroleum, its revenue was up by 12 per cent YoY in the latest quarter.
The C$ 10.11-billion market cap company saw its diluted earnings per share (EPS) zoom to C$ 3.03 in Q1 2022 compared to C$ 2.47 a year ago. Its normalized diluted EPS swelled by 19.1 per cent YoY to C$ 3.06 in the later quarter.
Also read: ATD, DOL, WN, MRU and Loblaw: 5 TSX retail stocks to buy in Q2
Canadian Tire’s stock performance
Canadian Tire Corporation stock saw its stocks slip by about nine per cent to close at a discounted price of C$ 372.16 on Thursday, May 12. CTC.A stock also plummeted by nearly 13 per cent in the past 52 weeks.
However, the retail scrip is currently ranking high among top price performers and consumer stocks. It has climbed by almost four per cent from its 52-week low of C$ 163.7 (May 11).
According to data gathered from EODHD/Others, CTC.A stock had a Relative Strength Index (RSI) value of 35.88 on May 12.
Bottomline
Considering its Q1 FY2022 performance, CTC.A stock seems to be an undervalued stock as it is still down by over 21 per cent from a 52-week high of C$ 213.85 (May 13, 2021). But, besides providing stable dividends, Canadian Tire is known to provide exposure to three different segments -- retail, financial services, and real estate -- which could diversify portfolio risk.
Please note, the above content constitutes a very preliminary observation based on the industry, and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
