This Resilient Dividend Stock Is Outperforming the Market in 2026, and It Still Looks Like a Buy

Shares of farm-and-ranch retail chain Tractor Supply (NASDAQ: TSCO) have pulled ahead of the broader market in early 2026. As of this writing, the stock was up about 7% year to date, while the S&P 500 is up less than 1%.

Tractor Supply is not only a resilient business, but it's a good dividend stock with a long history of increases. Earlier this month, the company raised its dividend 4.3% year over year to $0.96 per share on an annualized basis. That marked the company's 17th consecutive year of dividend increases.

But after an early 2026 move higher, does Tractor Supply still look like a buy for investors looking for dividend income?

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Essentials are making up for weakness in discretionary spending

Tractor Supply's latest results highlight the company's resilience -- even in a mixed consumer environment.

Its fourth-quarter net sales rose 3.3% year over year to $3.9 billion, with comparable-store sales increasing 0.3%.

In the company's fourth-quarter update, Tractor Supply CEO Hal Lawton said the quarter reflected a shift in consumer spending, with essential categories remaining resilient while discretionary demand moderated.

That mix -- the company's high percentage of sales from essential categories -- is key to the bull case for Tractor Supply. The business sells a lot of everyday items tied to animals and property upkeep. When discretionary demand slows, those categories can keep store traffic moving and reduce the chance of a sharp sales drop.

But there's more to be excited about when it comes to Tractor Supply than steady sales. There's good reason to believe that the company's sales growth rates could actually inflect at some point in the future. In fact, the company is investing in a number of growth opportunities. In its fourth-quarter update, management pointed to ongoing investment in initiatives like Project Fusion (a store remodel initiative), localization, direct sales, final-mile delivery, and pet and animal prescriptions -- initiatives that could increase comparable sales and expand the company's customer base.

Stronger growth is on the horizon

For the full year, management expects an acceleration in its same-store sales growth. For fiscal 2026, management guided for comparable store sales growth of 1% to 3%. Management also guided for earnings per share of $2.13 to $2.23.

Longer term, however, the company told investors in its fourth-quarter earnings call that it still expects to get to its long-term comparable store sales target range of 3% to 5% -- an algorithm that, when combined with planned store openings, expected operating margin expansion, and share repurchases, management believes will lead to annualized earnings per share growth in the range of 8% to 11%.

Of course, given the current softness in discretionary spending, the company won't likely achieve this growth algorithm in 2026. But I wouldn't be surprised to see the company get back to growth rates like these by 2027.

And keep in mind that the company pays a decent dividend in the meantime. Tractor Supply's dividend yield currently sits at 1.8%.

With shares trading at a price-to-earnings ratio of about 26 today, an acceleration in the company's comparable-store sales growth rate seems already priced in. But I think it's reasonable to believe the company will achieve its growth aspirations, as the assumptions underlying Tractor Supply's long-term targets don't seem unrealistic.

When you consider the company's long-term growth aspirations alongside Tractor Supply's resilient business model and dividend, it's easy to see why the stock looks attractive -- and ultimately why I think it's a buy today.

There are risks, of course. For instance, if discretionary categories remain under pressure, Tractor Supply may need to increase promotional intensity, which would show up in profitability.

Daniel Sparks and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tractor Supply. The Motley Fool recommends the following options: short April 2026 $55 calls on Tractor Supply. The Motley Fool has a disclosure policy.