In volatile markets, consumer stocks can be a safer choice for investors. Earlier this week, we looked at how one of Canada’s top grocery chains continues to thrive (read Grocery giant Metro knows how to shop for acquisitions). Today we examine an iconic Canadian retailer. Canadian Tire has a long history of fostering consumer loyalty, beginning with the Canadian Tire money it introduced in 1958. The company has grown substantially in recent years with strategic acquisitions. It is also prepared to spend for upgrades in its stores and online marketing. Financially sound, Canadian Tire remains a reliable dividend stock.

For our advice on another major Canadian retail chain, read Hudson’s Bay makes a big purchase in Germany.

Our three-prong approach to investing recommends that investors spread their money out across the five main economic sectors: Manufacturing, Resources, Consumer Goods, Finance and Utilities. We also advise investing mainly in well-established companies, and downplaying stocks in the broker/media limelight.

Due to recent stock market turmoil, investor interest in one of the less-volatile sectors—Consumer Goods—is rising.

That includes the well-known Canadian retailer we analyze below. It profits from recent acquisitions, while its upgraded stores attract more shoppers. It was also a pioneer in the loyalty programs that spur repeat visits with its Canadian Tire money.

CANADIAN TIRE CORP. (Toronto symbol CTC.A; www.canadiantire.ca) owns 495 Canadian Tire stores, which sell automotive, household and sporting goods. Franchisees run most of these outlets. Other operations include 297 gas stations and 91 PartSource auto parts stores. Canadian Tire has acquired a number of specialty retailers in the past few years.

These chains include Mark’s Work Wearhouse (since shortened to Mark’s), which sells casual and work clothing through 378 stores, and the Forzani Group, which sells sporting goods and athletic clothing through 433 stores, mainly under the Sport Chek and Sports Experts banners.

As part of a new growth plan, Canadian Tire is upgrading its stores and growing online. It plans to spend $575 million a year on these initiatives from 2015 to 2017.

Gasoline revenue down for Canadian Tire, but same-store sales up in all other areas

The cost of these upgrades, plus higher wages, cut the company’s earnings by 2.3% in the three months ended July 4, 2015, to $166.0 million from $169.9 million a year earlier. Earnings per share gained 1.3%, to $2.15 from $2.12, on fewer shares outstanding.

The latest quarter also included just 80% of the company’s financial services division after it sold a 20% stake to Bank of Nova Scotia (Toronto symbol BNS) last year. The deal cut $0.18 a share from Canadian Tire’s latest earnings.

Overall sales rose 2.9%, to $3.26 billion from $3.17 billion, as gains at the company’s retail stores and financial services division offset lower gasoline revenue.

Without gasoline, the company’s Canadian Tire outlets reported 3.2% higher same-store sales, thanks to higher demand for kitchen and gardening products, as well as tires. Same-store sales rose 4.8% at its sporting goods stores as more shoppers bought athletic shoes and clothing. Mark’s saw a 2.9% same-store sales increase on higher sales of men’s and women’s shoes.

The company will probably earn $7.78 a share in 2015, and the stock trades at 15.6 times that forecast. The $2.10 dividend yields 1.7%.

Recommendation in The Successful Investor: BUY.