North West Company: Retail Niche Powers Sustained Growth Potential

North west company stock — North West Company: Retail Niche Powers Sustained Growth Potential

The consistent sales growth and profit-margin expansion demonstrate the underlying strength of the North West’s business model.

Meanwhile, its commitment to shareholder returns through consistent dividend payments, combined with strategic investments in technology and operations, positions it well for sustained long-term growth. Management’s focus on private label expansion should continue driving profitability improvements while serving customers’ value-seeking behavior in the current economic environment.

The stock trades at just 14.9 times the company’s forward earnings forecast while yielding a solid 3.4%.

NORTH WEST COMPANY (Toronto symbol NWC; www.northwest.ca) sells food, and everyday products and services through 230 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.

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.

Solid quarterly gains posted as its retail niche keeps paying off

In the quarter ended April 30, 2025, overall sales rose 3.9%, to $641.4 million from $617.5 million a year earlier. Same-store sales rose 3.5% in the quarter compared to last year. Excluding one-time items, earnings in the quarter rose 14.2%, to $33.6 million, or $0.71 a share, from $29.4 million, or $0.62.

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. Meanwhile, to boost profits, as well as provide its customers with lower-priced products, North West continue to expand its private label offerings.

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 3.4%.

The stock now trades at an attractive 14.9 times the company’s likely fiscal 2026 earnings of $3.20 a share.

Recommendation in Dividend Advisor: North West Company is a buy.

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