In partnership with
Over the past 20 years, the S&P 500 delivered an average annual total return of 10.89%.
During that same timespan, Tractor Supply Company ($TSCO) delivered an average annual total return of 16.75%.
Tractor Supply Company is a “rural lifestyle retailer” that sells both farm essentials, like chicken feed and metal fenceposts, as well as recreational products for gardeners, hobby homesteaders, and do-it-yourself types.
If you’ve never visited one before, think of Tractor Supply as a hardware store, feed store, garden center, and camping store all rolled up into one venue.
In the event of a Lucifer’s Hammer or World War Z–type apocalypse, Tractor Supply is the store you’d want to visit so you could load up on survival essentials.
Unlike other retailers that are in competition with Amazon, many of Tractor Supply Company’s products have a built-in moat. A farmer is not going to buy 500 steel T-posts online or wait 3–5 days for a shipment of urgently needed electrolytes and antibiotics.
Products like electrolytes for livestock, twine and mesh for baling hay, fence posts and fencing wire, air compressors, trailers, rototillers, propane heaters, chicken feed, live baby chickens, stable bedding, stock tanks, work boots, utility gloves, hammers, and shovels are not things most people buy from Amazon or Temu.
Additionally, many Tractor Supply products are actually in-house private-label brands.
Brands like “Producer’s Pride” animal feed or “Ridgecut” work boots are owned by Tractor Supply. This is important because private labeling gives retailers higher profit margins, since they are selling their own products directly rather than acting as a middleman.
Tractor Supply also offers a customer loyalty program called “Neighbor’s Club.”
Neighbor’s Club memberships surpassed 38 million in early 2025, impressive growth for a program that only began in 2021.
In terms of the stock itself, Tractor Supply Company is somewhat expensive, trading at a price to earnings ratio of 24.84. However, this is a long-term market-beater, so the premium valuation makes sense.
Tractor Supply Company is also a dividend growth stock.
The company offers a 1.70% starting yield. Tractor Supply also has a 5-year compound annual dividend growth rate of 25.12% and a safe payout ratio of 44.44%.
The firm has raised its dividend every year for 17 consecutive years.
The biggest downside to this stock is something Peter Lynch discussed more than 40 years ago when analyzing firms like The Gap or Pier 1 Imports — saturation.
A retailer whose stock is already up 100% can go up another 100%, or even 500%, if there are still markets available for expansion. Lynch gave the example of Walmart, a stock that was already up more than 1,000% since its IPO. He stated that the company was still cheap and that shares could climb further because Walmart had expanded into only 18% of the U.S. market at the time.
Lynch was correct, and Walmart stock is up over 1,294% since he used it in his retail example.
There are currently 2,395 Tractor Supply stores in 49 states. With a niche retailer like this, it is difficult to gauge when a market is saturated. However, there are signs that Tractor Supply’s explosive growth period is over.
Over the past decade, the company delivered an average annual total return of 14.42%. These are still impressive returns, but they are lower than those of the S&P 500.
Additionally, Tractor Supply’s dividend growth has slowed. In 2021, the company raised its dividend by 30%. In 2022, by 77%. In 2023, by 12%. The last three raises have been 6.8%, 4.5%, and 4.3%, respectively.
The company is still growing its dividend, and the conservative payout ratio means distributions are well covered, but dividend growth is slowing.
Tractor Supply Company is a wide-moat retailer that offers unique products that are not typically ordered online. The stock is also a long-term market-beater with a history of impressive dividend raises.
However, total returns and dividend growth rates are slowing. And with a price to earnings ratio of 24.84, this is still a fairly expensive stock.
I would add this one to a stock watchlist and consider buying Tractor Supply shares if there were a broad market sell-off and the stock became significantly cheaper. This may sound like wishful thinking, but it’s something that actually happened in the spring of last year, when Tractor Supply sold off due to tariff fears.
Tractor Supply is a great business, it's just a little expensive right now.
You're overpaying for crypto.
Every exchange has different prices for the same crypto. Most people stick with one and pay whatever it costs.
CoW Swap checks them all automatically. Finds the best price. Executes your trade. Takes 30 seconds.
Stop leaving money on the table.
Disclaimer: This article is for entertainment purposes only. It is not financial advice, always do your own research.
