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Tractor Supply Hikes Dividend 30% After Strong Q4

Justin Kuepper Feb 17, 2021

Tractor Supply Company (TSCO) is the largest rural lifestyle retailer in the United States. With 1,923 stores in 49 states, the company is a one-stop shop for recreational farmers, ranchers, and others who enjoy living the rural lifestyle.

The company primarily generated revenue from livestock and pet products (48%), hardware, tools and trucks (23%), and seasonal, gift, and toy products (19%) during the third quarter of 2020, with clothing, footwear, and agriculture accounting for the remainder. The company also operates a Petsense division that focuses on pet and animal products.

Strong Q4 Financial Results

Tractor Supply reported fourth quarter revenue that rose 31.5% to $2.88 billion, beating consensus estimates by $160 million, on non-GAAP earnings of $1.64 per share, beating consensus estimates by $0.13 per share. Comparable sales rose 27.3% during the quarter, which was ahead of the 20.9% that analysts expected.

Goldman Sachs analyst Kate McShane upgraded the stock to Buy with an unchanged $170 price target on February 8, 2021. McShane cited new customers and initiatives, such as Fusion and Side Lot, along with strong execution in digital driving positive comps in 2021. The stock also trades at a discount to the market versus its two-year average.

The company raised its quarterly dividend by 30% to $0.52 per share, which represents a 1.3% forward yield. The dividend is payable on March 9, 2021 to shareholders on record as of February 22, 2021.

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