Can Tractor Supply Keep Its 17-Year Dividend Streak Alive?
Tractor Supply has raised its dividend every year for 17 straight years, but two consecutive earnings misses, a gutted outlook, and a stock down more than a third raise a pointed question about whether the rural retailer's cash flow can…
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Tractor Supply (NASDAQ:TSCO | TSCO Price Prediction) raised its quarterly dividend 4.3% to $0.24 in January, its 17th consecutive year of increases. Since then the company has missed earnings estimates twice, cut its fiscal 2026 outlook and withdrawn the long-term financial framework it laid out at its December 2024 Investor Day. The stock is down 35.56% year to date. Income investors now have to ask whether the payout is growing faster than the business behind it.
Feed and Fencing Hold Up While Big-Ticket Sales Slip
Tractor Supply sells to rural households and hobby farmers. Most of its demand comes from consumable, usable and edible (CUE) products such as animal feed and farm supplies, which customers keep rebuying in good times and bad ones. Riding mowers and seasonal goods sit on top as optional purchases. In the second quarter, CUE categories stayed positive and big-ticket sales fell by a mid-single-digit percentage. Comparable store sales dropped 1.5%.
“What has not changed is customer engagement. What has changed is customer spending behavior.”
CEO Hal Lawton blamed one bad month:
“Positive comparable store sales in April and June were more than offset by unusually adverse conditions in May, which drove second quarter results below our expectations.”
Annual Coverage Looks Solid, but 2026 Cash Flow Is Thin
At $31.62, the $0.96 forward dividend yields about 3.0%. The payout uses about 50% of trailing EPS of $1.91. In fiscal 2025, free cash flow (operating cash flow minus capital spending) came to around $740.5 million, and dividends took about 66% of it.
The first half of 2026 was tighter. Free cash flow was around $217.4 million, while dividends cost $252.0 million. A large spring inventory build explains much of the gap. On top of the dividend, the company spent $118M and $135.3M on buybacks in the first two quarters. On the July call, Chief Financial Officer Kurt Barton said:
“We maintain a strong balance sheet and preserve significant financial flexibility.”
How Lowe’s and Home Depot Compare
| Company | Dividend Yield | Trailing P/E | Forward P/E |
|---|---|---|---|
| Tractor Supply | 3.0% | 17 | 14 |
| Lowe’s (NYSE:LOW) | 2.63% | 16 | 16 |
| Home Depot (NYSE:HD) | 1.61% | 20 | 20 |
Tractor Supply now has a higher yield than both home improvement chains and the lowest forward multiple of the three. That changes its old identity. Annual dividend spending rose from $20.4 million in 2010 to $487.7 million in 2025, the profile of a low-yield stock with fast payout growth. After a December 2024 stock split, the quarterly rate went from $0.23 to $0.24, a much smaller step. Buyers today get a higher yield with slower growth.
What Would Break the Thesis
Analysts are cutting estimates. The fiscal 2026 EPS consensus fell to $1.8725 from $2.1153 90 days ago, with 12 down revisions and none up. Store openings planned for 2027 dropped to 85 to 90 from 100.
The conclusion: the dividend growth story still holds, but at a slower pace. A payout ratio near 51% of 2026 consensus EPS leaves room for small annual increases that keep the streak going. The thesis breaks if CUE categories turn negative, because that would mean the repeat-purchase base under the cash flow is collapsing. The next tests are the third-quarter report, where the consensus is $0.4077, and the new framework due with Q4 2026 results.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
