Finding the perfect mix of stocks to buy for your portfolio can be a daunting task, especially during a market downturn. Fortunately, the market gives us plenty of great opportunities including this one stellar growth stock to buy and hold for decades.
What is that stock to buy and hold in a market downturn?
The stock that investors should consider buying even during a market downturn is Alimentation Couche-Tard (TSX:ATD).
For those who are unfamiliar with the stock, Couche-Tard is one of the largest convenience store and gas station operators on the planet. The company boasts a massive network of over 14,000 locations in over two dozen countries.
And despite that massive footprint, Couche-Tard continues to take an aggressive stance on growth. Specifically, the company has branched out into other areas that are complementary to its core business such as car wash sites.
Couche-Tard is also in the process of building out a 200-site EV network in North America following a similar rollout in Europe. This is a unique development for the company for a few key reasons.
First, Couche-Tard is ahead of the curve compared to many of its peers who are still churning out conventional gas stations. Not only does this put the company in an advantageous position, but it also introduces an additional growth opportunity.
That growth opportunity comes in the form of a destination. Gas stations are not historically viewed as destinations but rather as an interim stop on the way to a destination. Given the longer time required to charge an EV, Couche-Tard has the opportunity to sell customers other products.
Finally, there’s the defensive appeal of Couche-Tard. Gas stations and convenience stores are incredibly defensive businesses. Even during the pandemic, they remained open while other businesses remained closed. Whether it’s gassing up or grabbing some milk and eggs on the way home, Couche-Tard’s retail stores provide a source of revenue for a company that is largely immune to market factors.
Should you buy Couche Tard right now?
As defensive as Couche-Tard is, the company is not entirely immune from the market. In the most recent quarter, Couche-Tard reported a drop in revenue and profits over the same period last year. Lower gas prices were primarily attributed to the drop, which saw revenues of US$15.6 billion come in 16% lower.
Net earnings also witnessed a drop of 4%, coming in at US$834.1 million for the quarter.
Despite that dip, Couche-Tard remains a stellar long-term growth pick. The company is also one of a handful of stocks that is up a whopping 19% year to date. Over a longer two-year period those gains extend to an incredible 42%.
That’s not all. If we look even further back over a more extended, five-year period, Couche-Tard shows an incredible 114% gain. In short, Couche-Tard is one of the best-performing stocks on the market, handily outperforming the market several times over. Keep in mind that the time period covers both the pandemic and subsequent market downturn.
For long-term investors looking for a buy-and-forget growth stock to add to their portfolio, it’s hard if not impossible to ignore what Couche-Tard can offer.
In my opinion, Couche-Tard is an outstanding stock that should be a core holding in every well-diversified portfolio, even in a market downturn.
