Experts and analysts have gone back and forth when it comes to predicting Canada’s economic fortunes over the next year. Canadians are hurting due to increased interest rates that have not been seen since before the Great Recession. However, a recent employment report showed that Canada added nearly 40,000 jobs in the month of August. It also reported wage growth of 5.2%.
Despite the better-than-expected report, Canadian investors might want to prepare for the worst as business sentiment remains gloomy. Today, I want to zero-in on Dollarama (TSX:DOL), a top defensive stock on the TSX.
Dollarama is the largest dollar store retail operator in the country. The dollar store retail industry experienced a renaissance following the Great Recession, enjoying a significant expansion in North America. Shares of Dollarama have climbed 10% month-over-month as of close on Friday, September 15. The stock is now up 19% so far in 2023.
The company released its second quarter (Q2) fiscal 2024 earnings on September 13. Dollarama delivered sales growth of 19% to $1.45 billion. EBITDA stands for earnings before interest, taxes, depreciation, and amortization, and aims to give a more complete picture of a company’s profitability. Dollarama achieved EBITDA growth of 23% to $457 million in Q2 FY2024.
Beyond that, the company added 18 net new stores in its most recent quarter. Moreover, diluted net earnings per share (EPS) jumped 30% to $0.86. Dollarama stock is trading in middling territory at the time of this writing. However, it remains on track for very strong earnings growth going forward. This is a defensive stock you can trust for the long haul.
