Investment Thesis
Dollarama (OTC:DLMAF) ((TSX: DOL)) delivered low single-digit same-store sales growth and negative same-store traffic growth in Q4 F2019. Looking forward, we believe it will continue to be a challenge to accelerate its SSSG and SSTG due to a slowdown in the Canadian economy. In addition, the competitive retail environment will make it tough to grow its same-store traffic. The company has increased its dividend every year since 2012 and has a low payout ratio of 14%. However, its shares are currently fairly valued. We think investors should wait on the sidelines.