Alimentation Couche-Tard (TSX:ATD)Â is one of the largest corporations in Canada, but is one many investors don't focus enough on. That's perhaps in part owing to the company's business model, which involves acquiring and operating thousands of gas stations and convenience stores. It's certainly not as "sexy" of a space to invest in, but one that has been extremely profitable for the company and investors over the long term.

Let's dive more into this company and see if ATD stock is one worth adding right now.

A business model that pays

As mentioned, Couche-Tard is a massive conglomerate, operating under a number of banners in primarily the North American and European markets. Dealing in food, non-food items and transportation fuels, the company distributes products through independent operators, merchandising, and franchisees and offers carwash services.

Over the past 10 years, Alimentation Couche-Tard has been a top performer on the Toronto Stock Exchange and offered consistent growth to its shareholders through its innovation and expansion strategies in the European markets. As the company continues to grow into new markets, its ability to increase the return on its invested assets should improve its earnings and cash flow growth profile, propelling the stock higher from a fundamental perspective.

Strong recent results

On that note, it's important to look at Couche-Tard's previous performance to see if the company's future outlook is in line with reality. In June of this year, the company reported its full fiscal year results for 2024. The convenience retailer brought in US$69.2 billion in revenue and operating income of US$3.8 billion. With net earnings of more than US$2.7 billion, this is a very profitable company that's benefiting from its scale and expansion efforts.

As Couche-Tard continues to grow its same-store sales, I expect organic and acquisition-driven growth should propel its fundamentals to become even more attractive over time. With a dividend yield of 0.9% and a price-earnings ratio of 21 times, this is a stock that seems fairly valued, given its growth prospects moving forward.

Is ATD stock a buy?

It's my view that there are few defensive stocks in the market with the kind of long-term consistent growth profile as Couche-Tard. This is a company that has plenty of upside over the long term due to its market expansion initiatives. And even if it were to hold its footprint the same, I think organic growth could be more than enough to justify its current multiple.

As far as Canadian stocks are concerned, Couche-Tard remains among my top picks for these reasons and more.

The post ATD Stock: Buy, Sell, or Hold Today? appeared first on The Motley Fool Canada.