Casey’s General Store (CASY) is good ol’ stock. Started out of a three-car garage in 1959, the company has grown to be the 10th largest convenience store chain in America. It’s gas stations/convenience stores are in 14 states and surround the company’s distribution center just outside of Des Moines, Iowa, mainly in Iowa, Missouri and Illinois.
Ten Year Chart
CASY has been a good ol’ stock, rising 16% per year during the last decade. But to be fair the prior decade wasn’t so good. The company is now profiting from convenience store trends such as fresh sandwiches and prepared pizzas. Casey’s General Store actually introduced pizza a while back, in 1985, and is now the 5th largest pizza chain in the US. Prepared foods continue to drive sales and profits, these rose 10% year-over-year in existing locations as gas sales were flat.
Although CASY’s stock has done well, the profit growth rates along the bottom of the chart aren’t so hot. Sometimes profits fall, and other times they jump. Although I consider this a conservative stock, there’s quite a few other stocks I feel are safer. Especially in the Healthcare sector.
Profit History
Recently CASY has been selling for around 19x earings. Right now the company sells for 21x earnings, which I think is just a wee-bit too high. The company’s estimated long-term profit growth rate is 12% a year and you get a 1% yield too for an estimated 13% total return.
Sharek’s Take
Casey’s is a good ol’ stock that I feel has the ability to provide returns in excess of 10% per year. Convenience stores are doing a good job of selling more than just gas, and that trend is bound to continue. This company not only uses its cash to pay a dividend but also buys other gas stations chains as well, such as the 24 Stop-n-Go stores it nabbed in 2014. But like many good stocks, CASY is overvalued right now and I feel has to come down around 10% for me to climb aboard. For now CASY stays on the radar..
View the One Year Chart here. View the Earnings Table here.
