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  5. ATD: Long term holder of ATD and starting to rethink my investment based on their company size. [Alimentation Couche-Tard Inc.]
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Q: Long term holder of ATD and starting to rethink my investment based on their company size. I feel the company may now be too large to emulate their previous track record. When compared to the smaller Casey's in the US, ATD has vastly underperformed it's smaller peer recently. Also, they seem to be missing forecasts more frequently the last couple of years which may explain their all in pursuit of 7-11. If the takeover doesn't occur, are there other growth levers the company can pursue to resume growing their top & bottom lines consistently again? Thx
Asked by Sarantos on May 29, 2025
5i Research Answer:

ATD has missed estimates in 5 of the past 8 quarters. If 7/11 does not happen, there will be other deals. The company's acquisition record of success is very strong, and it has a lot of available capital to deploy. CASY has done better, but is now 75% more expensive on a valuation basis. There is a trade-off here. ATD's dividend is higher, though a 1% not a huge factor. Based on consensus, CASY is still expected to show better growth in the next two years. Growth for ATD will come from fuel, M&A and continued cost control. We would be reluctant to sell the stock outright but CASY looks decent in its own right for those willing to pay a premium valuation.