ALIMENTATION COUCHETARD $29.50 - Toronto symbol ATD.B

ALIMENTATION COUCHETARD $29.50 (Toronto symbol ATD.B: TSINetwork Rating: Extra Risk) (1-800-361-2612; www.couchetard.com; Shares outstanding: 565.8 million; Market cap: $16.6 billion; Dividend yield: 0.5%) plans to keep looking for big acquisitions like its $2.7-billion purchase of Norway’s Statoil Fuel & Retail gas station chain in June 2012.

However, the company has a long history of not overpaying for acquisitions; in 2010, it dropped its $2-billion U.S. hostile takeover offer for Casey’s General Stores after competitor 7-Eleven outbid it. And earlier this year, it stayed out of the running to buy oil and gas giant Hess Corp.’s 1,354 U.S. gas stations and convenience stores. Marathon Petroleum eventually paid $2.9 billion.

Meanwhile, Couche-Tard’s sales rose 2.0% in the quarter ended April 27, 2014, to $9.0 billion from $8.8 billion a year ago. Earnings per share rose 10.0%, to $0.22 from $0.20. (All figures except share price and market cap in U.S. dollars. Per-share amounts adjusted for a 3-for-1 stock split on April 14, 2014).

The company raised its quarterly dividend by 21.2% with the July 2014 payment, to $0.04 from $0.033. The shares yield 0.5%.

Couche-Tard is a buy.

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