Executive chairman Alain Bouchard wants consumer stock Couche-Tard “to become the world’s preferred destination for convenience and fuel.”
Montreal-based consumer goods stock Alimentation Couche-Tard Inc. (TSX—ATD.B) operates nearly 14,350 stores worldwide. It writes that it’s “the leader in the Canadian convenience store industry. In the United States, it is the largest independent convenience store operator in terms of the number of company-operated stores.
“In Europe, Couche-Tard is a leader in convenience store and transportation fuel retail in the Scandinavian countries (Norway, Sweden and Denmark), in the Baltic countries (Estonia, Latvia and Lithuania) as well as in Ireland, Russia, and has an important presence in Poland.”
An Asian beachhead
Couche-Tard now plans to build its business in Asia. It will pay US$360 million to acquire Circle K HK. It operates 340 company-operated Circle K convenience stores in Hong Kong—for the second-largest market share in the city. Circle K HK also has 33 franchised sites in Macau.
One thing that Couche-Tard wants to learn from Circle K HK is how to operate high-density retail outlets. Unlike in most of North America, there’s little room to spread out convenience stores and gas pumps in large crowded Asian cities.
A buy for capital gains and dividends
Couche-Tard plans to use Circle K HK as a platform to expand in Asia. Co-founder and executive chairman Alain Bouchard said “together we can reach millions more customers in Hong Kong and across Asia as we move forward in our journey to become the world’s preferred destination for convenience and fuel.”
Alimentation Couche-Tard remains a buy for further long-term share price gains and small but growing dividends.
This is an edited version of an article that was originally published for subscribers in the November 20, 2020, issue of The Investment Reporter. You can profit from the award-winning advice subscribers receive regularly in The Investment Reporter.
The Investment Reporter, MPL Communications Inc.
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The Investment Reporter •1/24/21 •