When David Gardner originally recommended PETsMART
I've often overlooked PETsMART, but the company's recent capital allocation makes me more curious about the business. Aside from paying a dividend, which I love to see, the company has begun repurchasing its shares in a meaningful way. Today PETsMART announced an extension of this effort.
These repurchases initially absorbed the rather large dilution created since 2001 by stock options. However, since 2004, the share count has been stable to slightly declining. The company's rate of dilution via stock options has slowed a great deal as PETsMART has matured. Last year, the possible dilution via option grants was 2%, quite reasonable for a company growing at PETsMART's pace.
The company's line of services, such as pet grooming, training, and pet hotels, has driven PETsMART's recent performance, helping to separate it from would-be big-box competitors like Wal-Mart
That said, shares in PETsMART and its competitor Petco
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