North West Company stands out due to its dominant market position in remote regions with limited competition and a captive customer base. Its diversified offerings and supply chain capabilities provide it with a significant operational advantage in serving remote locations.
The company’s financial performance further strengthens its investment case, with a 4.0% increase in same-store sales and 2.6% dividend payout raise in the most recent quarter. This gives you plenty of incentive to invest.
The stock trades at 16.2 times the company’s forward earnings forecast.
NORTH WEST COMPANY (Toronto symbol NWC) sells food, and everyday products and services through 227 stores. Those locations are mainly in northern communities across Canada and Alaska. Through your shares, you also tap the company’s operations in remote regions of Hawaii, the wider South Pacific and the Caribbean.
North West’s food offerings consist of perishable and non-perishable products including groceries, dairy, produce, meat, convenience foods, food service, home meal replacement, health and beauty aids, paper products and cleaning supplies. Its general merchandise assortment is broad, and includes family apparel, housewares, sporting goods, toys, furniture, appliances, home entertainment, snowmobiles, all-terrain vehicles (ATVs), boats and outboard motors. The company also offers other everyday products and services such as gasoline, pharmacy and financial services like cheque cashing, ATMs and prepaid card products.
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North West owns North Star Air Ltd., a Thunder Bay-based airline. North Star provides cargo and passenger services in the following regions of Canada: northwestern Ontario, northern Manitoba and Nunavut. Its operational hubs are in Pickle Lake, Red Lake, Sioux Lookout and Kapuskasing, Ontario, and Thompson, Manitoba. North Star lets North West provide faster, more consistent delivery of merchandise to its stores in northern Canada that are inaccessible by all-weather roads. North Star’s current fleet comprises 18 aircraft, including three Basler BT-67, seven Pilatus PC-12, five ATR 72, and three Dash 8’s.
Value Stocks: North West Company rewards investors with consistent dividend hikes.
In its fiscal 2025 third quarter, ended October 31, 2024, North West’s overall sales rose 3.3%, to $637.5 million from $616.9 million a year earlier. Same-store sales rose 4.0% in the quarter compared to last year. Excluding one-time items, earnings in the quarter fell 3.1%, to $40.1 million, or $0.84 a share, from $41.4 million, or $0.87. The decline was primarily due to higher expenses and increased income taxes.
All in all, the long-term outlook for the company and its investors remains positive. That’s especially so for its operations in the North, including Alaska, where the company holds a dominant market position.
With the October 2024 payment, North West raised its quarterly dividend by 2.6%, to $0.40 a share from $0.39. The new annual rate of $1.60 yields a solid 3.5%.
North West’s annual payment to shareholders has now risen an average 3.9% in the past 5 years. The company’s TSI Dividend Sustainability Rating is Above Average.
Recommendation in Dividend Advisor: North West Company is a buy.
