Alimentation Couche-Tard: Invest In Electric Vehicles Growth Without Picking An EV Constructor

Electric vehicles are coming in strong. A world without car running on fuel? There’s a convenience store that already thought about it. Alimentation Couche-Tard (ANCUF) is a Canadian company that operates a network of convenience stores mostly across North America. While its yield is very low, it is an interesting addition to any kind of portfolio, even retirees’.

With its stock price appreciation potential, its proven recession-resiliency business model, its growth by acquisition strategy, and its electric vehicles superchargers, ANCUF has everything an investor needs. Let’s discuss this company more in details with this stock analysis.

Business Model

Alimentation Couche-Tard Inc. operates a network of convenience stores across North America, Ireland, Scandinavia, Poland, the Baltics, and Russia. The company primarily generates income through the sale of tobacco products, groceries, beverages, fresh food, quick-service restaurants, car wash services, other retail products and services, road transportation fuel, stationary energy, marine fuel, and chemicals.

In addition, the company operates more stores under the Circle K banner in other countries such as China, Egypt, and Malaysia. Its operation is geographically divided into U.S., Europe, and Canada. Revenue from external customers falls mainly into three categories: merchandise and services, road transportation fuel, and other.

Investment Thesis

An investment in ANCUF is definitely not for an income-producing stock. However, if you are looking at the long-term horizon, your dividend payouts will grow in the double digits for a while and you will enjoy a strong stock price growth. ANCUF’s potential is directly linked to its capacity to acquire and integrate more convenience stores. Management has proven its ability to pay the right price and generate synergy for each deal.

ANCUF shows a perfect combination of the dividend triangle: revenue, EPS, and strong dividend growth. With the coronavirus’s impact on the economy, ANCUF may be able to acquire more chains at attractive prices.

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