Dollarama vs. Canadian Tire – Best Investment Idea

Canadian Tire has a much lower valuation than Dollarama which gives one the impression that it is a better company to invest in. This is clearly a false assumption.

 However here are the relevant numbers below as follows:

 3 year Annualized                    Cdn Tire            Dollarama

 Revenues                                       2.43%                      12.55%

 Net Income                                   9.74%                     20.34%

 EPS                                                12.21%                       26.41%

 The Total Return over the last three years for the two stocks is:

 Canadian Tire                +52.66%

 Dollarama                       +142.1%

It is obvious to me that Dollarama is a better company to invest in despite the higher valuation.

 Peter McMurtry

Posted in Blog Post.

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