Is Canadian Tire (TSX:CTC.A) an iconic stock to buy?

Retail giant Canadian Tire Corporation Limited (TSX:CTC.A) has attracted quite a bit of investor and analyst attention over the past year. Through the lows of the COVID-19 pandemic, when most brick-and-mortar retailer suffered, Canadian Tire sailed through on the back of its digital business strength.

Canadian Tire is essentially a physical retail store chain, with deep penetration across the country. But its e-commerce platform has also grown substantially to make its own space amid mainstream omnichannel retailers. In the latest quarter ending April 3, 2021, its e-commerce sales catapulted by 257 per cent year-over-year (YoY) to C$ 450 million.

The Toronto-based chain started out in the early 1920s as a tire shop. Over the decades, however, it has expanded to become a retail giant that sells an assortment of products, ranging from home goods, clothing, shoes, to car parts, accessories and fuel.

One of the main reasons behind Canadian Tire’s rising sales amid the pandemic was a steady demand for discretionary goods. With physical stores selling non-essential goods staying shut amid the lockdowns, customers seeking discretionary products had to turn to the online market, and that’s where Canadian Tire’s e-commerce platform is likely to have scored. 

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With the vaccine rollouts strongly progressing, the economy is expected to return to normalcy soon. And the demand for consumer discretionary items is expected to remain strong as more businesses open. In that post-COVID scenario, Canadian Tire’s sales figures are likely to expand further as it will not only still be present online, but will also have its stores open for business for walk-in customers.

Let’s take a look at how Canadian Tire stocks performed in the last year.

Canadian Tire Corporation Limited (TSX:CTC.A)

During the pandemic lows in March last year, Canadian Tire stocks dwindled to a value of C$ 71.31 (March 24, 2020). From there, its share price has rocketed by nearly 175 per cent in the last 15 months to close at C$ 195.87 on Wednesday, June 23.

CTC.A stock presently records a one-year growth of nearly 62 per cent. In the last nine months, the scrip expanded by over 43 per cent.

Although it has dipped by over eight per cent from its present 52-week high of C$ 213.85 (May 31, 2021), CTC.A stock has climbed by 17 per cent year-to-date (YTD).

On the financial front, Canadian Tire’s consolidated retail sales surged by 13.1 per cent YoY to C$ 3.1 billion in Q1 FY21, while its consolidated revenue ballooned 16.7 per cent YoY to C$ 3,322.9 million.

Canadian Tire presently pays a dividend of C$ 1.175 on a quarterly basis, which will be payable on September 1, 2021. Its ex-dividend date falls next month, on July 29.

The above constitutes a preliminary view and any interest in stocks should be evaluated further from investment point of view.



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