Agro Sector Ideas

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Tractor Supply has room to run - >>> Tractor Supply isn't nearly done with its high-growth phase. The rural lifestyle retailer in late January revealed that sales jumped 21% year over year in the fiscal fourth quarter even after having spiked a year earlier. The company is winning market share in its pet, livestock, and rural home furnishings niches. It is also boosting sales through a healthy balance between higher customer traffic and increased spending per visit.

There's room for these gains to continue for many years even as the company adds more stores to its base. Profitability and cash flow trends are solid, too, meaning you don't have to worry much about a recession severely disrupting the business. And, with the company's recent dividend boost (its 14th consecutive annual hike), an increasing amount of your returns will come from steadily rising dividend income.

The stock has gained 142% over the past three years and its price-to-earnings ratio sits at a somewhat premium 24.5. But that P/E is down significantly from where it was at the start of 2022 (around 30), suggesting a buying opportunity.

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