Tractor Supply (NASDAQ: TSCO) is my pick for dividend investors right now. The company, which is the largest rural lifestyle retailer in the U.S., sells everyday needs for recreational farmers, ranchers, pet owners, and homeowners. Importantly for investors, it’s heavy on high-frequency categories like pet food and animal feed — products that keep its loyal customers coming back regularly.
Fortunately, shares have treaded water this summer, despite improved results, leaving a reasonable entry point for a business that continues to show strength each year. There’s a lot to like: Comparable store sales (sometimes referred to as same-store sales) are improving, management expects an even stronger second half, and the dividend still has plenty of headroom. Add a fair valuation for a consistent operator, and I like the risk-reward from here.
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