Alimentation Couche‑Tard (TSX:ATD) has been one among Canada’s most dependable compounders for many years, however the inventory faces a unique set of questions heading into 2026.
For years, traders might rely on double‑digit development pushed by acquisitions, scale, and operational effectivity.
Extra not too long ago, that tempo has slowed, and the corporate’s makes an attempt to purchase 7‑Eleven raised considerations about how a lot runway stays for mega‑offers.
Concurrently, volatility associated to gas demand and the rise of electrical automobiles (EVs) has raised new considerations amongst traders. These shifts have led some traders to query whether or not Couche‑Tard nonetheless deserves its “eternally inventory” status.
With that in thoughts, it’s value taking a more in-depth look to reply that query.
Meet Couche-Tard
Couche‑Tard operates greater than 17,000 shops throughout 29 nations below Circle Ok and different banners. The corporate generates its income from gas, comfort retail, and a rising foodservice section.
A protracted historical past of disciplined acquisitions and finest‑in‑class integration has been the spine of its development technique.
In brief, scale, effectivity, and regular money circulate stay central to the enterprise mannequin.
Why traders are questioning the enterprise
The primary concern is that Couche‑Tard’s development has slowed from its historic double‑digit tempo to a extra modest tempo. In reality, it’s not an indication of firm weak point, however fairly a shift from that hyper-growth period.
The second situation is the failed $47 billion bid for 7‑Eleven, which might have created the world’s largest comfort retailer operator.
Had that deal succeeded, it might have include important regulatory and governance considerations. It will additionally elevate questions in regards to the urge for food amongst regulators for comparable mega-acquisitions. This mirrors different segments of the market the place regulators cooled on mega‑mergers after a wave of enormous offers.
Regulators aren’t the one ones with that feeling. Buyers stay involved about acquisition fatigue and whether or not the explosive development of the final decade could be matched.
Lastly, we have now gas margin volatility. Gas stays a serious revenue driver for the corporate, regardless of lengthy‑time period uncertainty round EV adoption. This provides a layer of uncertainty to an in any other case defensive enterprise mannequin.
These considerations clarify why that “eternally inventory” label is being re‑examined.
Why it nonetheless seems like a eternally inventory
Regardless of these headwinds, there are nonetheless loads of causes to see Couche‑Tard as that long-term eternally inventory.
Its scale benefit is gigantic, giving the corporate unmatched buying energy and operational leverage throughout its international community. Moreover, comfort retail and gas stay extremely defensive companies, supported by on a regular basis purchases and important journey wants.
In different phrases, Couche-Tard isn’t a vacation spot in itself. Quite, it serves as a necessary cease enroute to that vacation spot. And that cease gives all of the facilities its clients want.
That results in the corporate’s Foodservice section, which stays an underappreciated development lever. That is very true following the GetGo acquisition, which added increased‑high quality choices.
Turning to acquisitions, Couche-Tard’s integration observe report is among the many finest within the business.
The corporate has developed a selected knack for extracting worth from bolt‑on offers and realizing these synergies. It’s additionally shifted towards buybacks, returning extra capital to shareholders following the deserted 7‑Eleven bid.
Lastly, there’s the dividend. Whereas modest, the 1.14% yield comes with regular dividend development supported by robust money circulate.
Closing take
Couche‑Tard might not be the hyper‑development machine it as soon as was, nevertheless it continues to show the qualities that outline a sturdy compounder.
Its scale, defensiveness, disciplined capital allocation, and constant execution give it endurance even in a altering business.
The following decade will doubtless look completely different from the final, with slower development and extra measured growth. However for traders snug with these shifts, Couche‑Tard nonetheless stands out as a powerful candidate for a eternally inventory in any well-diversified portfolio.
It stays a enterprise constructed for lengthy‑time period compounding, even when the trail ahead is extra gradual.
