>>> Tractor Supply -- Paying a 1.8% dividend, rural lifestyle retailer Tractor Supply has the largest yield of this group. Over the last five years, Tractor Supply has seen annualized dividend growth of 28% and maintained a payout ratio of 39%. A company's payout ratio measures the percentage of net income used to pay its dividends each year -- highlighting that Tractor Supply has ample room for increases, even if net income doesn't grow.
However, the company has increased earnings per share (EPS) by 19% annually since 2013, so it isn't likely the company's profits will stagnate for an extended period. Led by a Neighbor's Rewards Club with over 31 million members -- a figure that grew by 19% from last year -- Tractor Supply's sales are steadier than one might think.
Even as consumer spending tightened in 2023, leading to a drop in seasonal and big-ticket purchases, the company eked out same-store sales growth of 3% thanks to its consumable, usable, and edible (CUE) sales rising by over 10%. These repeat sales help Tractor Supply generate consistent profitability, recording a return on invested capital (ROIC) of 34%. This ROIC places the company in the top decile of the S&P 500 and is an excellent sign for interested investors as stocks with higher ROICs outperform their less-profitable peers.
With a price-to-earnings (P/E) ratio of 22, Tractor Supply trades at a slight discount to its historical averages, making it an elite dividend growth stock to buy and hold forever.
Market Data 
Markets 
