A Growing Rural Lifestyle Retailer Is Tractor Supply
Know Tractor Supply at all? There’s a good probability that if you reside in an urban location, you haven’t entered one of their stores. However, Tractor Supply is not your typical retailer. They specialize in offering goods that fit the rural lifestyle, and both new and old clients are beginning to favor them.
Key Growth Drivers
The retailer has been expanding steadily as a result of a number of factors, including a rise in the number of stores, a broad product range, a strong reward program, and a large assortment of goods that are tailored to the needs of rural consumers. As seen by their most recent double-digit dividend rise, these have led to steady sales, profit, and dividend growth for the business.
Outstanding Financial Results
Tractor Supply reported a 21% YoY rise in sales for the just ended fiscal year 2022, which included one additional week compared to the prior year. As a result, the company’s annual total revenues increased by 11.6%. Earnings per share for the firm increased by 12.8% to $9.71. Tractor Supply’s successful business strategy allowed it to repurchase $700 million worth of its own shares and distribute $410 million in dividends to shareholders.
Placing Bets on the Future
According to Hal Lawton, CEO of Tractor Supply, the firm had another exceptional year in 2022 as they continued to grow their market share and progress their strategic goals. A loyalty program, a better digital user experience, shop renovations, and the inclusion of side lots to provide a greater product range are a few of these projects. The company’s financial statistics demonstrate that these efforts have paid off, since they show growth in both sales and profitability.
Dividend Growth
The firm Tractor Supply just announced a 12% rise in dividends, making it the 14th year in a row that dividends have increased. According to Tractor Supply chairperson Cynthia Jamison, the enhanced distribution reflects the company’s confidence in its “Life Out Here” strategy and solid cash flow creation as it continues to invest for future development and distribute money to shareholders.
The company’s quarterly dividend has increased significantly over the past several years, more than tripling in only four years, from $0.31 in 2019 to $1.03 now. There is space for future growth as just 38% of company earnings over the previous 12 months were distributed as dividends.
Investment Opportunity that is Attractive
Although Tractor Supply’s 1.8% dividend yield isn’t very high, it does become fairly alluring when you take into account the stock’s modest 24 times earnings valuation and the company’s sound fundamentals. It is anticipated that further profits growth will support the company’s continued dividend increase.