| Tractor Supply has done it again. Today they once again increased their dividend and this time increased it by 20%. This is in line with their 3 year average of 25.70% and their 5 year average of 27.22%. These increases have been both exceptional as well as consistent. |  |
Tractor Supply Company (TSCO) declares $0.24/share quarterly dividend, 20% increase from prior dividend of $0.20. Forward yield 1.0% Payable June 1; for shareholders of record May 16; ex-div May 12.
Tractor Supply Company operates rural lifestyle retail stores in the United States. It offers a selection of merchandise, including equine, livestock, pet, and small animal products necessary for their health, care, growth, and containment; hardware, truck, towing, and tool products; seasonal products, such as heating products, lawn and garden items, power equipment, gifts, and toys; work/recreational clothing and footwear; and maintenance products for agricultural and rural use. As of December 26, 2015, the company operated 1,488 stores in 49 states. It operates its retail stores under the Tractor Supply Company, Del’s Feed & Farm Supply, and HomeTown Pet names. The company also operates an e-commerce Website at TractorSupply.com. It sells its products to recreational farmers, ranchers, and others, as well as tradesmen and small businesses. Tractor Supply Company was founded in 1938 and is based in Brentwood, Tennessee.
(Summary) (Company) (Chart)
| 3 May 2016 Price $95.10 1yr Target $101.94 Analysts 22 Dividend $0.80 Payout Ratio 25.88% 1yr Cap Gain 7.19% Yield 0.84% 1yr Tot Return 8.03% P/E 30.81 PEG 2.09 Beta 1.03 | EPS (ttm) $3.09 EPS next yr $3.99 EPS next 5yr 14.72% 1yr Price Support $58.73 Market Cap $12.72 Bil Revenues $6.36 Bil Earnings $420 Mil Profit Margin 6.60% Quick Ratio 0.20 Current Ratio 2.00 Debt/Equity 0.20 | 1yr RevGR 9.01% 3yr RevGR 10.00% 5yr RevGR 11.34% 1yr EarnGR 12.78% 3yr EarnGR 16.26% 5yr EarnGR 21.78% 1yr DivGR 25.00% 3yr DivGR 25.70% 5yr DivGR 41.70% ROA 17.40% ROE 30.70% |
My Perspective
I've been following this company for a long, long time and I've liked it the entire time. The fundamentals are incredible and the consistency of the numbers are rare for just about any company regardless of its size. But theres one simple reason I haven't bought a single share so far. And that reason is value. This company is expensive with a P/E over 30 and a yield less than 1%. At these levels, it's about 50% higher than I generally like to pay for a stock.
I've looked at this company many times before and I always come to the same conclusion. It's just too expensive for my taste. But in hind sight that may have been a mistake. Two things have always seem to remain the same. It's always been expensive and it's always made a lot of money for its shareholders.
So I'm about to do one of those things I've always told myself I'd never do. Overpay for a stock. And that's because I don't think this stock will ever be cheap and my stinginess has unfortunately kept me out of this stock for far too long. But that's about to change.
A company making this much money and increasing it's dividend this fast needs to be in my portfolio. Like most investments, I'll start with a small investment and then grow the position whenever the stock pulls back to a reasonable level. But that may not happen in this case so I'll add to my position whenever it's a little less expensive. I just don't need to pass up on these dividend increases any longer.
And then maybe I'll feel a little better about my many trips to my local Tractor Supply Store.
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