ATD-A.TO  Alimentation Couche-tard Inc M...

Exchange

TSX

Sector

Diversified Industries

Industry

Market Cap.

34.95B

Vuru Grade

37.20/100

Current Price

$61.49
-1.01 (-1.62%)

Growth Price

$29.89
Overvalued by 51.39%

Stability Price

$7.43
Overvalued by 87.92%

Company Metrics

  • P/E 29
  • P/S 0.94
  • P/B 5.91
  • EPS 2.12
  • Cash ROIC 11.04%
  • Cash Ratio 0.20
  • Dividend 0.29 / 0.59%
  • Avg. Vol. 1,616.00
  • Shares 568.39M
  • Market Cap. 34.95B

Company Description

Alimentation Couche-Tard Inc. engages in the operation of convenience stores. The company offers its customers approximately 3,200 products that include traditional convenience store items, such as tobacco products, beer/wine, frozen beverages, candy and snacks, coffee, and dairy items, as well as fresh food and foodservice. It also provides services, including automatic teller machines, lottery t... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

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Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for ATD-A.TO to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate ATD-A.TO's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$61.49 Current Price

$29.89 Growth Price (DCF)

Overvalued by 51.39%


Growth Rate Assumed by Market: 37.97%


Future Free Cash Flow Growth Rate: 15.0%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$7.43 Stability Price (EPV)

Overvalued by 87.92%


Discount Rate: 15.0%

$80.53 Book Price

Undervalued by 30.97%


Satisfactory Cash Return on Invested Capital over the past 5 years

ATD-A.TO has somewhat efficiently invested its financial resources in buildings, projects, and equipment. If CROIC is inconsistent, it's likely ATD-A.TO could be benefiting from a one-time event or has a mixed history of investing capital productively. Read the company's Annual Report to determine whether this can improve.

ATD-A.TO has created $11.04 of cash for every $100 invested.
Figures in USD. Fiscal year ends in April
20132014201520162017
Free Cash Flow 624.10M 899.90M 1.08B 982.20M 931.40M
divided by
Invested Capital 6.75B 7.37B 7.85B 9.00B 10.28B
Cash ROIC 9.25% 12.21% 13.76% 10.91% 9.06%

Excellent Return on Equity over the past 5 years

Over the past 5 years, ATD-A.TO has generated strong profits with money shareholders have invested. This is considered one of the best indicators of quality management. Beware of extremely high Return on Equity (> 50%) as this is often unsustainable.

ATD-A.TO has generated $21.21 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in April
20132014201520162017
Net Income 572.80M 812.20M 933.50M 1.19B 1.21B
divided by
Stockholders' Equity 3.22B 3.96B 3.89B 5.04B 6.01B
Return on Equity 17.81% 20.50% 23.98% 23.67% 20.12%

Excellent Business Performance over the past 10 years

ATD-A.TO has been able to maintain profitability in good times and bad. This could mean ATD-A.TO has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

ATD-A.TO has created positive free cash flow for 9 or more of the past 10 years.
Figures in USD. Fiscal year ends in April
2008200920102011201220132014201520162017
Free Cash Flow 79.50M 264.60M 259.90M 394.10M 447.20M 624.10M 899.90M 1.08B 982.20M 931.40M

Weak Balance Sheet

ATD-A.TO's financial position is not ideal. The key is to check whether ATD-A.TO is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in USD. Fiscal year ends in April
2008200920102011201220132014201520162017
Cash 216.00M 173.30M 220.90M 320.40M 321.50M 658.30M 511.10M 575.80M 599.40M 645.20M
Current Assets 945.20M 844.50M 1.03B 1.29B 1.34B 3.28B 3.21B 2.71B 2.93B 3.17B
Total Assets 3.32B 3.26B 3.70B 4.00B 4.45B 10.55B 10.55B 10.84B 12.30B 14.17B
Current Liabilities 862.50M 789.00M 882.90M 1.02B 1.57B 3.14B 2.66B 2.42B 2.71B 3.25B
Total Liabilities 2.07B 1.93B 2.08B 2.06B 2.28B 7.33B 6.58B 6.95B 7.26B 8.16B
Stockholder' Equity 1.25B 1.33B 1.61B 1.94B 2.17B 3.22B 3.96B 3.89B 5.04B 6.01B
Current Ratio 1.10 1.07 1.17 1.26 0.85 1.05 1.21 1.12 1.08 0.98
TL-to-TA 0.62 0.59 0.56 0.52 0.51 0.69 0.62 0.64 0.59 0.58

Consistent Reinvestment of Profits over the past 10 years

ATD-A.TO has consistently retained profits. This may put ATD-A.TO in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, ATD-A.TO can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in April
2008200920102011201220132014201520162017
Retained Earnings 775.00M 932.60M 1.17B 1.44B 1.83B 2.34B 3.08B 3.92B 5.02B 6.08B
Retained Earnings Growth - 20.34% 25.13% 23.78% 26.47% 28.31% 31.29% 27.49% 28.01% 21.13%

Highly Competitive Industry over the past 10 years

It's likely that ATD-A.TO is in an industry with low barriers to entry, spurring high competition. If Gross Margins are at least satisfactory, it's likely ATD-A.TO invests heavily in R&D and Sales, General & Administrative expenses.

Only $2.18 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in April
2008200920102011201220132014201520162017
Net Income 189.30M 253.90M 302.90M 370.10M 457.60M 572.80M 812.20M 933.50M 1.19B 1.21B
divided by
Revenue 15.37B 15.78B 16.44B 18.97B 23.00B 35.54B 37.96B 34.53B 34.14B 37.90B
Net Profit Margin 1.23% 1.61% 1.84% 1.95% 1.99% 1.61% 2.14% 2.70% 3.50% 3.19%

Inconsistent Gross Profit Margins over the past 10 years

ATD-A.TO has good gross profit margins, however inconsistency of these margins is a cause for concern. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$23.64 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in April
2008200920102011201220132014201520162017
Gross Profit 2.22B 2.44B 2.55B 2.79B 23.00B 4.61B 4.99B 5.27B 6.08B 6.48B
divided by
Revenue 15.37B 15.78B 16.44B 18.97B 23.00B 35.54B 37.96B 34.53B 34.14B 37.90B
Gross Margin 14.47% 15.44% 15.53% 14.69% 100.00% 12.97% 13.15% 15.26% 17.81% 17.10%

High Capital Intensity over the past 10 years

ATD-A.TO spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

83.31% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in April
2008200920102011201220132014201520162017
Capital Expenditure 280.30M 238.20M 230.90M 224.80M 316.60M 537.30M 529.40M 634.50M 905.70M 994.10M
divided by
Net Income 189.30M 253.90M 302.90M 370.10M 457.60M 572.80M 812.20M 933.50M 1.19B 1.21B
Capital Expenditure Ratio 148.07% 93.82% 76.23% 60.74% 69.19% 93.80% 65.18% 67.97% 75.87% 82.23%

Very Strong Dividend History over the past 10 years

ATD-A.TO has consistently distributed a dividend for at least the past 10 years. Such a long dividend history suggests ATD-A.TO is very established in its market and that its dividend distribution is likely to continue for a significant period of time.
Figures in USD. Fiscal year ends in April
2008200920102011201220132014201520162017
Dividend Paid 25.60M 24.10M 25.10M 32.80M 49.80M 55.60M 64.60M 86.90M 104.10M 145.30M
divided by
Shares Outstanding 206.48M 197.47M 188.74M 188.15M 183.58M 560.57M 568.14M 568.71M 569.20M 569.29M
Dividend Paid Per Share 0.12 0.12 0.13 0.17 0.27 0.10 0.11 0.15 0.18 0.26
Price at Year End - - - - 48.15 80.00 49.02 62.80 62.35 63.85
Dividend Yield - - - - 0.56% 0.12% 0.23% 0.24% 0.29% 0.40%

History of Stock Buybacks over the past 10 years

ATD-A.TO has some history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in April
2008200920102011201220132014201520162017
Shares Outstanding 206.48M 197.47M 188.74M 188.15M 183.58M 560.57M 568.14M 568.71M 569.20M 569.29M
Stock Bought Back - 4.56% 4.62% 0.32% 2.49% -67.25% -1.33% -0.10% -0.09% -0.02%
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