Contrasting Alimentation Couche-Tard (OTCMKTS:ANCTF) and Canadian Tire (OTCMKTS:CDNTF)

Canadian Tire (OTCMKTS:CDNTF) and Alimentation Couche-Tard (OTCMKTS:ANCTF) are both consumer cyclical companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, dividends and valuation.

Earnings and Valuation

This table compares Canadian Tire and Alimentation Couche-Tard”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Canadian Tire	N/A	N/A	N/A	$7.48	19.93
Alimentation Couche-Tard	N/A	N/A	N/A	$1.55	32.00

Canadian Tire is trading at a lower price-to-earnings ratio than Alimentation Couche-Tard, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

2.2% of Canadian Tire shares are owned by institutional investors. Comparatively, 6.7% of Alimentation Couche-Tard shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Canadian Tire and Alimentation Couche-Tard’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Canadian Tire	N/A	N/A	N/A
Alimentation Couche-Tard	N/A	N/A	N/A

Analyst Recommendations

This is a summary of current ratings for Canadian Tire and Alimentation Couche-Tard, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Canadian Tire	0	0	0	0	0.00
Alimentation Couche-Tard	0	0	1	3	3.75

Dividends

Canadian Tire pays an annual dividend of $1.73 per share and has a dividend yield of 1.2%. Alimentation Couche-Tard pays an annual dividend of $0.53 per share and has a dividend yield of 1.1%. Canadian Tire pays out 23.0% of its earnings in the form of a dividend. Alimentation Couche-Tard pays out 34.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Canadian Tire is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Alimentation Couche-Tard beats Canadian Tire on 5 of the 8 factors compared between the two stocks.

About Canadian Tire

Canadian Tire Corporation, Limited provides a range of retail goods and services in Canada. It operates in three segments: Retail, CT REIT, and Financial Services. The Retail segment retails automotive maintenance products and accessories, parts, and tires, as well as automotive services and roadside assistance; electrical, hardware, home environment, paint, plumbing, and tool products; cleaning, food & drink, home décor, home essentials, home organization, kitchen, and pet care products; camping, exercise, hockey, hunting, fishing, seasonal recreation, and team sports and golf products; and backyard living, backyard fun, cycling, gardening, outdoor tools, seasonal, and toy products. This segment offers its products under the Canadian Tire, Canadian Tire Gas, Pro Hockey Life, Mark's, PartSource, Helly Hansen, Party City, and SportChek brand names. This segment also participates in loyalty programs, as well as sells its products online. The CT REIT segment operates as a closed-end real estate investment trust that holds a portfolio of properties comprising Canadian Tire stores, Canadian Tire anchored retail developments, industrial properties, mixed-use commercial property, and development properties. The Financial Services segment provides consumer credit cards, in-store financing, insurance products, and retail and broker deposits; and savings accounts and guaranteed investment certificates. Canadian Tire Corporation, Limited was founded in 1922 and is headquartered in Toronto, Canada.

About Alimentation Couche-Tard

Alimentation Couche-Tard Inc. operates and licenses convenience stores in North America, Europe, and Asia. It offers cigarette products and other nicotine products, grocery items, candies and snacks, beer, wine, beverages, and fresh food offerings; road transportation fuels and electric vehicle charging solutions; and aviation fuels, as well as energy for stationary engines. The company operates its convenience stores chain under the Circle K, Couche-Tard, Holiday, Ingo, and Mac’s brands. It is also involved in the sale of lottery tickets, calling and gift cards, postage stamps, and bus tickets; and provision of automatic teller machines and car wash services. In addition, it operates and licenses stores operated under the Circle K banner in Cambodia, Egypt, Guam, Guatemala, Honduras, Indonesia, Jamaica, Macau, Mexico, New Zealand, Saudi Arabia, South Africa, Tanzania, the United Arab Emirates, and Vietnam. The company was formerly known as Actidev Inc. and changed its name to Alimentation Couche-Tard Inc. in December 1994. Alimentation Couche-Tard Inc. was founded in 1980 and is headquartered in Laval, Canada.