Is it a good company at a reasonable price? I think this is a good company, but you have to be careful of when you buy. Look at the Total Return paragraph below. The Total Return has been below 8% years 5, 10, 20 and 35. If you like this stock, be careful. It is always best to buy stocks you like several times over a few years and in different months. The stock price seems to be in the reasonable range at the present time.
I own this stock of Canadian Tire Corp (TSX-CTC.A, OTC-CDNAF). In 2000 when I first bought this stock, it was on the Investment Reporter's list of conservative Canadian stocks. I bought stock for my trading account in 2009 because I have done well with it in my Pension Account and it was a consumer stock. I have moved all my shares from my Pension Account to my Trading Account.
When I was updating my spreadsheet, I noticed I have done well with this stock which I first bought in 2000, some 26 years ago. I made other purchases over the years. I have a total return of 11.62% per year with 9.05% from capital gains and 2.57% from dividends to the end of 2025. The dividend yield on my original purchase in 2000 is 32%.
If you had invested in this company in December 2015, for $1,063.44 you would have bought 9 shares at $118.16 per share. In December 2025, after 10 years you would have received $439.20 in dividends. The stock would be worth $1,565.46. Your total return would have been $2,004.66. This would be a total return of 7.23% per year with 3.94% from capital gain and 3.29% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $118.16 | $1,063.44 | 9 | 10 | $439.20 | $1,565.46 | $2,004.66 |
The current dividend yield is moderate with dividend growth moderate. The current dividend yield is moderate (2% to 4% ranges) at 3.84%. The 5 and 10 median dividend yields are moderate at 4.29% and 3.21%. The historical dividend yield is low (below 2%) at 1.71%. The dividend growth for the past 5 years is moderate (between 8% and 14% per year) at 9.3% per year. The last dividend increase was in 2026 and it was for 1.41%. The dividend increases in 2024 and 2025 were also below 2%. They are probably low because the DPRs are getting too high.
The Dividend Payout Ratios (DPR) need improving. The DPR for 2025 for Earnings per Share (EPS) is too high at 73% with 5 year coverage better at 48%. The DPR for 2025 for Adjusted Earnings per Share (AEPS) is too high at 52% with 5 year coverage better at 39%. The DPR for 2025 for Cash Flow per Share (CFPS) is good at 20% with 5 year coverage at 16%. The DPR for 2025 for Free Cash Flow (FCF) is too high at 54% with 5 year coverage better at 35%. The FCF for 2025 are $670M and $370M. I am using the $670M.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 73.42% | 48.36% |
| AEPS | 51.56% | 38.72% |
| CFPS | 19.52% | 15.84% |
| FCF | 53.99% | 34.69% |
Debt Ratios shows that that there is a lot of debt, but most ratios are fine. The Long Term Debt/Market Cap Ratio for 2025 is good at 0.42 and currently at 0.39. The Liquidity Ratio for 2025 is good at 1.83 and 1.83 currently The Debt Ratio for 2025 is a bit low at 1.48 and 1.48 currently. I like to see this ratio at 1.05 or higher. The Leverage and Debt/Equity Ratios for 2025 are too high at 3.16 and 2.16 and currently at 3.16 and 2.16.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.42 | 0.39 |
| Intang/GW | 0.15 | 0.14 |
| Liquidity | 1.83 | 1.83 |
| Liq. + CF | 1.92 | 2.02 |
| Debt Ratio | 1.46 | 1.46 |
| Leverage | 3.16 | 3.16 |
| D/E Ratio | 2.16 | 2.16 |
The Total Return per year is shown below for years of 5 to 37 to the end of 2025. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2020 | 5 | 9.31% | 4.47% | 0.78% | 3.69% |
| 2015 | 10 | 12.95% | 7.23% | 3.94% | 3.29% |
| 2010 | 15 | 15.29% | 9.48% | 6.44% | 3.04% |
| 2005 | 20 | 13.34% | 6.93% | 4.69% | 2.24% |
| 2000 | 25 | 12.19% | 12.30% | 9.35% | 2.95% |
| 1995 | 30 | 10.06% | 11.13% | 8.51% | 2.62% |
| 1990 | 35 | 8.72% | 7.66% | 5.82% | 1.84% |
| 1988 | 37 | 9.59% | 8.53% | 6.51% | 2.02% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 8.86, 10.22, and 11.58. The corresponding 10 year ratios are 10.85, 12.24 and 13.64. The corresponding historical ratios are 10.45, 13.06 and 14.85. The current ratio is 14.65 based on a stock price of $187.27 and EPS estimate for 2026 of $12.78. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 10.12, 11.36 and 12.54. The corresponding 10 year ratios are 10.15, 11.42 and 12.69. The corresponding historical ratios are 10.15, 11.93 and 14.56. The current ratio is 13.13 based on a stock price of $187.27 and EPS estimate for 2026 of $14.26. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $188.77. The 10-year low, median, and high median Price/Graham Price Ratios are 0.86, 0.99 and 1.10. The current ratio is 0.99 based on a stock price of $187.27. The current ratio is at the median ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable and at the median.
I get a 10-year median Price/Book Value per Share Ratio of 1.72. The current ratio is 1.69 based on a Book Value of $5,881M, Book Value per Share of $111.06 and a stock price of $187.27. The current ratio is 2% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I also have a Book Value per Share estimate for 2026 of $111.80. This implies a ratio of 1.68 with a Book Value of $5,920M and a stock price of $187.27. This ratio is 3% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10-year median Price/Cash Flow per Share Ratio of 8.38. The current ratio is 6.16 based on Cash Flow per share estimate for 2026 of $30.42, Cash Flow of $1,611M and a stock price of $187.27. The current ratio is 27% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
I get an historical median dividend yield of 1.71%. The current dividend yield is 3.84% based on dividends of $7.20 and a stock price of $18.7.27. The current dividend yield is 125% above the historical median dividend yield. This stock price testing suggests that the stock price is relatively cheap.
I get a 10 year median dividend yield of 3.21%. The current dividend yield is 3.84% based on dividends of $7.20 and a stock price of $18.7.27. The current dividend yield is 19.9% above the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median. But it is very close to being cheap.
The 10-year median Price/Sales (Revenue) Ratio is 0.58. The current P/S Ratio is 0.60 based on Revenue estimate for 2026 of $16,442M, Revenue per Share of $310.53 and a stock price of $187.27. The current ratio is 4.8% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
Results of stock price testing is that the stock price is probably reasonable. The 10 year dividend yield test says it is reasonable and very close to cheap. The P/S Ratio test says it is reasonable and above the median. The rest of the testing varies from cheap to expensive. A good one is always the P/GP Ratio test and that one says that the stock price is relatively reasonable and below the median.
When I look at analysts’ recommendations, I find Buy (2), Hold (7), and Underperform (2). The consensus would be a Hold. The 12 months stock price consensus is $191.45 with a high of $211.00 and a low of $172.00. The consensus stock price of $191.45 implies a total return of 6.08% with 2.23% from capital gains and 3.84% from dividends based on a current stock price of $187.27.
It is interesting that there is on Stock Chase a lot of Do Not Buys in 2024. There was also a couple of Buy on Weakness. For 2026 there is Partial Sell as analysts likes DOL and NWC better. Joey Frenette on Motley Fool says Canadian Tire is the iconic retailer that probably deserves a nice spot in your portfolio, especially after the recent resilience. Daniel Da Costa on Motley Fool says Canadian Tire is another impressive Canadian stock that offers an attractive mix of dividends and growth. The company put out a Press Release about their fourth quarter results for 2025.
This stock is on the Money Sense 100 best dividend stock list rated as a C. Simply Wall Street via Yahoo Finance reviews this company. They note that they acquired the Hudson's Bay Company's iconic stripes and related intellectual property for CA$30.00 million. They have 4 warnings out on this stock of debt is not well covered by operating cash flow; large one-off items impacting financial results; dividend of 3.83% is not well covered by free cash flows; and profit margins (3.5%) are lower than last year (5.3%). Note that the company has Adjusted Earnings per Share which copes with the large one-off items impacting financial results.
Canadian Tire is a leading general merchandise retailer. The retailer boasts a wide array of owned and affiliated banners that include its iconic namesake brand, Mark's, Sport Chek, Sports Experts, PartSource, and Party City. Its web site is here Canadian Tire Corp.
The last stock I wrote about was about was Choice Properties REIT (TSX-CHP.UN, OTC-PPRQF) ... learn more. The next stock I will write about will be Manulife Financial Corp (TSX-MFC, NYSE-MFC) ... learn more on March 16, 2026 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
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