Canadian Tire (TSX:CTC.A) is a retailer that requires no introduction. Investors are adjusting to a low-growth economy, so defensive stocks like Canadian Tire should be coming into view. This retailer deals in a wide range of products and has proven to be resilient in turbulent economic times.
Shares of Canadian Tire have climbed 2.1% in 2019 as of mid-afternoon trading on October 25. The company is expected to release its third quarter 2019 results in early November.
In the second quarter, Canadian Tire reported retail revenue growth of 7.8%. Each of its main stores posted comparable sales growth in Q2.
The board of directors last declared a quarterly dividend of $1.0375 per share. This represents a 2.9% yield. The company has achieved dividend-growth for eight consecutive years. Canadian Tire stock possesses a price-to-earnings ratio of 12.9 and a price-to-book value of 2.2.
Canadian Tire is fit as a defensive stock in your portfolio as investors wrestle with the reality of a low-growth environment. I like its acquisition of Party City, a niche store that is surprisingly reliable. We are just passing through a particularly busy time for the retailer, Halloween.
Canadian Tire is already projecting that Party City’s revenue will double from $140 million to $280 million in 2021. Its partnership with Canadian Tire will help push towards that goal.
Investors on the hunt for defensive stocks will usually seek out grocers or utilities, but I like Canadian Tire as a consumer staple pick today.
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