Dividend Stock on Watch: Tractor Supply Company (TSCO)

Company Profile:

Tractor Supply Company is the largest rural lifestyle retail store chain in the United States. Tractor Supply stores are focused on supplying the lifestyle needs of recreational farmers and ranchers and others who enjoy the rural lifestyle, as well as tradesmen and small businesses. As of January 26, 2017, it operated 1,600 retail stores in 49 states. The company operates its retail stores under the Tractor Supply Company, Dels Feed & Farm Supply, and Petsense names. It also operates an e-commerce Website, TractorSupply.com. The company sells its products to recreational farmers, ranchers, and others, as well as tradesmen and small businesses. Tractor Supply Company was founded in 1938 and is headquartered in Brentwood, Tennessee.

Recent News:

Its Board of Directors increased the Company’s quarterly cash dividend 12.5% to $0.27 per share of the Company’s common stock, up from the previous $0.24 per share. The dividend has been paid on June 6, 2017, to stockholders of record as of the close of business on May 22, 2017.

For the first quarter 2017, the company’s net sales increased 6.6% to $1.56 billion from $1.47 billion in the first quarter of 2016. Gross profit increased 4.8% to $518.2 million from $494.4 million in the prior year’s first quarter. Net income decreased 10.9% to $60.3 million from $67.7 million and diluted earnings per share decreased 8.0% to $0.46 from $0.50 in the first quarter of the prior year.

 

Fundamental Analysis:

Ninestocks analyzes several different financial aspects: Growth, Profitability, solvency and efficiency.

Growth – Measures the growth of both the company’s income statement and cash flow.

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Profitability – Measures the historical price movement of the stock.

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Solvency – Measures the solvency of the company based on several ratios.

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Efficiency – Measures the strength and historic growth of a company’s return on invested capital.

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Conclusion:

TSCO’s strengths can be seen in its better growth, strong profitability, better solvency and robust efficiency compared with its peers. Its net income and revenue have increased over several years. Technical indicators signal the bullish signs, as there is a bullish cross in Stochastic Oscillator and RSI stands at 40.51 with positive bias. We rate Tractor Supply Company (TSCO) a STRONG BUY.

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