For years, investors could count on double-digit growth, driven by acquisitions, scale and operational efficiency.
More recently, that pace has slowed, and the company’s attempts to buy 7-Eleven have raised concerns about how much runway is left for megadeals.
At the same time, volatility related to fuel demand and the rise of electric vehicles (EVs) have raised new concerns among investors. These shifts have led some investors to question whether Couche-Tard still deserves its reputation as a “forever stock.”
With that in mind, it’s worth taking a closer look to answer that question.
Meet Couche-Tard
Couche-Tard operates more than 17,000 stores in 29 countries under Circle K and other banners. The company derives its revenue from fuel, convenience retail and a growing foodservice segment.
A long history of disciplined acquisitions and best-in-class integration formed the backbone of the growth strategy.
In short, scale, efficiency and steady cash flow remain central to the business model.
Why investors are questioning the company
The first concern is that Couche-Tard’s growth has slowed from its historic double-digit pace to a more modest pace. In reality, it’s not a sign of company weakness, but rather a shift away from the hyper-growth era.
The second problem is the failed $47 billion bid for 7-Eleven, which would have created the world’s largest supermarket operator.
Had that deal gone through, it would have raised significant regulatory and governance concerns. It would also raise questions about interest among regulators in similar mega-takeovers. This mirrors other segments of the market where regulators cooled down on mega-mergers after a wave of big deals.
Supervisors are not the only ones with that feeling. Investors remain concerned about acquisition fatigue and whether the explosive growth of the past decade can be matched.
Finally, we have fuel margin volatility. Fuel remains a key profit driver for the company, despite long-term uncertainty over electric vehicle adoption. This adds a layer of uncertainty to an otherwise defensive business model.
These concerns explain why the forever stock label is being reexamined.
Why it still looks like forever stock
Despite these headwinds, there are still plenty of reasons to view Couche-Tard as that stock for the long term.
The economies of scale are enormous, giving the company unparalleled purchasing power and operational influence within its global network. In addition, convenience retail and fuel remain highly defensive activities, supported by everyday purchases and essential travel needs.
In other words: Couche-Tard is not a destination in itself. Rather, it serves as an essential stopover on the way to that destination. And that stop offers all the facilities its customers need.
That leads to the company’s Foodservice segment, which remains an underappreciated growth engine. This is especially true after the GetGo acquisition, which added higher quality offers.
In terms of acquisitions, Couche-Tard’s integration track record is among the best in the industry.
The company has developed a special ability to extract value from complementary deals and realize these synergies. It has also shifted to buybacks, returning more capital to shareholders after the abandoned 7-Eleven bid.
Finally, there is the dividend. Although modest, the 1.14% yield is accompanied by steady dividend growth, supported by strong cash flow.
Last recording
Couche-Tard may not be the hyper-growth machine it once was, but it continues to demonstrate the qualities that define a sustainable blender.
The company’s scale, defensiveness, disciplined capital allocation and consistent execution give it staying power, even in a changing industry.
The next decade will likely look different from the last, with slower growth and more measured expansion. But for investors comfortable with these shifts, Couche-Tard still stands out as a strong candidate for a forever stock in any well-diversified portfolio.
It remains a company built for long-term growth, even if the path forward is more gradual.
#Alimentation #CoucheTard #stock