Tim Hortons and Esso are two retail outlets that you will see in many parts of Canada. Tim Hortons is in the quick service food business and Esso is the band name of gas stations owned by Imperial Oil.
1. Tim Hortons
Tim Hortons sells donuts, over-sized muffins, coffee,Iced Cappucino, Timbits besides other food items. Started in 1964 in Hamilton,Ontario Tim Hortons has become a highly successful operation. As per Wikipedia “As of July 1, 2007, there were 2,733 outlets in Canada, 345 outlets in the United States and one outlet just outside Kandahar, Afghanistan.” In many small towns in Canada such as Sudbury,ON Tim Hortons seems to be the place that the entire town people visit whenever they can to grab a donut and coffee. Canadians just love Tim Hortons. They just can’t seem to get enough of them.
While the Tim Hortons model has been a success as a business, its stock has not been a hit with investors. Buying a Tim Hortons franchise is profitable than buying its stock – this is the widely held belief among Canadian investors. Getting a franchise in Canada is not easy since there is a such a high demand for those licenses.
Tim Hortons Inc. trades in the New York with the ticker THI. The stock has a dividend yield of 1.08% and a market cap. of just under $6.0 B S&P; has a 2 star rating. THI is an average stock but worth watching. Unlike Starbucks Tims is not closing hundreds of stores in this economy.
2. Esso
Imperial Oil, an integrated oil company, markets gasoline in Canada under the “Esso” brand. Esso was named to resemble the infamous Standard Oil(SO) Company of John D.Rockefeller. Some 70% of the company is owned by the US oil giant Exxon Mobil.Today Imperial owns some 700 of the 1900+ Esso gas stations in Canada.
Imperial Oil trades on the NYSE as IMO. The market cap. is about $45.0B and the dividend yield is 0.74%. The stock has a 5 year annual dividend growth rate of 4.56%. PE ratio is just 14.00.
An investor looking to gain some exposure to Canadian oil plays can add some IMO to their diversified portfolio.
