Tractor Supply Boosts Its Dividend 30% After Beating Q4 Predictions

Agricultural, gardening, and country lifestyle retailer Tractor Supply Company (NASDAQ:TSCO) reported its fourth-quarter and full fiscal year 2020 results this morning, beating analyst consensus in both earnings per share (EPS) and revenue. Zacks Equity Research reports adjusted EPS rose 35.5% year over year from $1.21 to $1.64, also providing nearly 8% positive surprise above average expectations of $1.52. Zacks also notes this is the fourth positive surprise in a row.

Revenue popped 31.5% from Q4 2019’s $2.19 billion to Q4 2020’s $2.88 billion, representing 6% positive surprise versus analyst expectations. The company’s press release says its whole-year 2020 results set new records for both sales and earnings. Its fiscal year officially ended Dec. 26, 2020.

A Tractor Supply Company storefront, illuminated by morning light with a partly cloudy sky above.

Image source: Tractor Supply Company.

Tractor Supply’s board of directors voted to boost its quarterly dividend to $0.52, an upward surge of 30%. Both the number of purchases and the size of each purchase grew by more than 10% during Q4. The press release also notes “e-commerce sales experienced triple-digit percentage growth for the third consecutive quarter.”

Investor sentiment on Tractor Supply for 2021 hinges not only on its outstanding 2020 results, but also on its guidance. The company says it expects diluted EPS for the full 2021 fiscal year to be $6.50 to $6.90, just a few cents higher than in 2020.

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While net sales in 2020 were $10.6 billion, Tractor Supply is guiding for $10.7 billion to $11 billion for 2021, while comps may drop 2% or rise 1%. All of this suggests an abrupt slowdown compared to 2020’s gains, helping explain why investors have bid the company’s shares down more than 3% so far in morning trading.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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