Brian Madden - BNN - TOP PICK Dollarama Inc: (DOL TSX)
Dollarama is Canada’s largest dollar store chain with over 1,500 stores and plans to grow to 2,000 in the coming years. Its key competitive advantages are procurement and merchandising which allows it to price extremely sharply, an ability to secure high-traffic locations at low cost as well as operational efficiency within stores and distribution centres. Growth requires very modest capital and is easily financed internally such that the company generates over $700 million of annual free cash flow, much of which it returns to shareholders via dividends and share buybacks. Dollarama has grown earnings at a compound rate of 19 per cent over the last decade and should continue to grow at a mid-teens pace in the coming years. The company’s majority stake in its Central American joint venture, Dollar City, further extends and accelerates its growth in fast-growing economies where modern retailing is in its infancy.
Not woned personally or by family ; fund yes.