Casey’s General Stores, Inc. has a long and successful history, starting as a service station in Des Moines, Iowa in 1959. Founder Donald Lamberti transformed the station into a convenience store, eventually expanding to rural towns with populations under 5,000. The chain went public in 1983, reaching $1 billion in sales by 1996. Despite offers from major companies like Alimentation Couche-Tard and 7-Eleven, Casey’s remained independent.
As of April 30, 2024, Casey’s operates 2,658 stores, primarily in areas with populations under 20,000. The company owns most of its real estate, distribution centers, and stores, allowing for vertical integration and self-sufficiency in expansion efforts. Casey’s also offers a rewards program through its mobile application.
Casey’s growth strategy focuses on industry consolidation through mergers and acquisitions. Recent deals include acquiring Buchanan Energy’s Bucky’s Convenience Stores, Circle-K stores in Oklahoma, and stores from Pilot Corporation and EG America LLC. The company also entered the Texas market by acquiring Long Star Food Stores and Fikes Wholesale.
Three key advantages contribute to Casey’s success. Convenience stores are inherently defensive businesses, remaining resilient during recessions. Casey’s reputation for quality food, especially pizza, drives customer loyalty. The company’s low cost of debt enables strategic investments in growth and stock buybacks.
Financial data over the past 30 years demonstrates Casey’s consistent profitability and growth. The company’s balance sheet reflects steady asset growth and prudent debt management. Market valuation metrics suggest Casey’s is currently trading at a relatively high level, but its predictable business operations and growth trajectory make it a compelling long-term investment.
Investing in Casey’s is not without risks. Adapting to changing consumer preferences, operational disruptions, and shifts in energy trends pose challenges to the company’s performance. Government regulations on tobacco products and potential shifts away from petroleum-based fuels could impact sales and margins.
In conclusion, Casey’s General Stores presents a strong investment potential for long-term growth. The company’s history of success, strategic growth initiatives, financial stability, and brand reputation position it well for continued expansion and profitability in the convenience store industry. Investors should carefully consider the risks and opportunities associated with investing in Casey’s to make informed decisions about their portfolios.
