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