1 Magnificent TSX Dividend Stock Down 38% to Buy and Hold for Decades

As escalating geopolitical tensions recently triggered a stock market sell-off, many quality stocks also started sinking. But for long-term investors, these moments often open the door to buying strong businesses at a bargain. In this article, I’ll highlight one of the best TSX dividend stocks that could be worth holding for decades.

A pet retail stock with deep roots in Canada

The TSX dividend stock I find really attractive right now is Pet Valu Holdings (TSX:PET). This Markham-headquartered company has built a strong presence in Canada’s pet care market over the years, becoming a go-to destination for pet owners. With more than 800 stores operating under banners like Pet Valu, Bosley’s, Total Pet, and Tisol, the company has created a wide and accessible retail network across the country.

What makes PET’s business even more attractive is the nature of demand for its products. No matter the broader economy, most pet owners continue to prioritize their pets, helping create stable sales for pet-focused businesses.

Despite that, its shares have plunged by nearly 38% over the last six months, making them look cheap to buy and hold for the long term. PET stock offers a 2.5% annualized dividend yield at the current market price of $21.35 per share.

Strong numbers highlight steady execution

Even as many retailers have struggled due to macroeconomic and geopolitical challenges lately, Pet Valu’s recent results show that it continues to execute well. In the fourth quarter of 2025, its system-wide sales increased 9.2% YoY (year-over-year) to $423.7 million, while its revenue rose 10.6% to $326.4 million.

On the profitability side, its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) grew 9.4% YoY to $74.6 million, making up 22.9% of revenue. Meanwhile, the company’s adjusted net profit climbed 5.5% from a year ago to $34 million. These numbers clearly reflect that its business is growing while maintaining solid profitability.

What’s driving performance behind the scenes

Like most retailers, Pet Valu is not immune to cost pressures. In the latest quarter, its gross margin edged down to 33% due to pricing and promotional investments. At the same time, selling, general, and administrative costs rose 13.6% YoY due mainly to higher wages, technology spending, and store-related expenses.

Even with these pressures, however, the company managed to grow by focusing on operational efficiency and customer engagement. Its proprietary brands and higher units per transaction helped it gain market share, showing that demand for its products remains strong.

Growth plans that support long-term potential

Despite short-term challenges, Pet Valu continues to focus on plans to expand its footprint and strengthen its fundamentals. The company plans to reinvest about $35 million into the business in 2026. This includes around $20 million in capital spending and $15 million in transformation initiatives aimed at improving efficiency and pricing strategies.

These investments should help the company stay competitive while unlocking new growth opportunities, especially in wholesale and distribution.

Why this dip could be a long-term opportunity

Pet Valu currently offers a great combination of steady demand, an expanding store network, and disciplined execution, making it a strong candidate for long-term investing. Its business is also supported by a loyal customer base and a category that tends to remain resilient over time. That’s an important advantage when thinking about holding a stock for decades.

The post 1 Magnificent TSX Dividend Stock Down 38% to Buy and Hold for Decades appeared first on The Motley Fool Canada.

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More reading

• This TSX Dividend Stock Is Down 20% and Built for the Long Haul
• This TSX Dividend Stock Is Down 50% and Built to Last a Lifetime
• A TSX Dividend Stock Down 42% That’s Worth Buying Before it Rebounds

Fool contributor Jitendra Parashar has no position in any of the stocks mentioned. The Motley Fool recommends Pet Valu. The Motley Fool has a disclosure policy.