Who Is TSCO (Tractor Supply)?: Examining the Rural/Suburban “Supply Hub” Business Through the Numbers and Competitive Landscape

* This report is based on data as of 2026-01-08.

Explaining TSCO’s business like you’re in middle school

TSCO (Tractor Supply Company), in plain English, is “a big-box store that sells tools and everyday consumables in one place for rural and suburban customers who care for animals, work on their yards, and do DIY projects.” It sells through both stores and online, and a defining feature is its push to make “heavy and bulky products” deliverable to customers’ homes.

Its customer base goes well beyond professional farmers. The format appeals to “people who regularly need tools and consumables in everyday life,” including home gardeners and hobby-farm households, suburban single-family homeowners who handle their own upkeep, pet owners, and small business operators buying supplies for job sites.

What it sells and how it earns (the profit model)

• Gross profit from merchandise sales: Sells feed, pet supplies, yard and home maintenance products, tools and hardware, seasonal items, and more through stores and e-commerce.
• Repeat purchases of consumables: “Run-out” items like feed create a natural reason to come back, making repeat buying easy to turn into habit.
• Making heavy items “purchasable”: Captures demand by enabling delivery and pickup for products that are difficult to source locally, such as heavy feed and large outdoor items.
• Recurring pet purchases: Extends from supplies into prescriptions and subscription delivery via Petsense (a pet specialty chain) and the acquired Allivet (an online pet pharmacy).

Future upside (small today, strategically meaningful)

• Full-scale expansion of Allivet: Prescriptions and subscription delivery are highly recurring and fit naturally with TSCO’s existing base of pet owners.
• Building out last-mile delivery in-house: The more TSCO can reliably deliver “heavy, bulky, and urgent” items, the more convenience improves in rural markets—and the easier it becomes to grow basket size.
• Exclusive and co-branded products: As with the Field & Stream partnership, expanding “only available here” offerings helps reduce the need to compete purely on price.

As a simple analogy, TSCO functions as a “resupply hub” for animals, yards, and DIY in rural and suburban life. Customers come in for feed, add tools along the way, and have heavy items delivered. Over time, “pet medications” can plug into that same routine.

The long-term “type”: what kind of growth company TSCO has been

In Peter Lynch terms, the first step is understanding “what the company is, and what type it has been during its growth.” On long-term data, TSCO is best described as a “hybrid” between a Fast Grower (higher growth) and a Stalwart (large-cap quality). Even if automated screens don’t slot it neatly into one bucket, the fundamentals read like a “growth-tilted quality stock.”

Long-term growth trajectory (revenue, EPS, FCF)

• EPS (annual) CAGR: +17.0% over the past 5 years, +14.4% over the past 10 years. Most recent FY (2024) EPS is 2.04 (FY).
• Revenue (annual) CAGR: +12.2% over the past 5 years, +10.1% over the past 10 years. Most recent FY (2024) revenue is approximately $14.88bn (FY).
• FCF (annual) CAGR: +1.4% over the past 5 years, +9.9% over the past 10 years. Most recent FY (2024) FCF is approximately $0.637bn (FY).

The key takeaway is that FCF growth has lagged (especially over the last 5 years) relative to EPS and revenue growth. That can be consistent with a business sensitive to store expansion, logistics investment, and working capital, but this article does not make a definitive claim; it simply frames the structure: “FCF has not grown as much as earnings.”

Profitability: high ROE and ~10% operating margin

• ROE: 48.5% in the most recent FY (2024). Around the middle of the past 5-year range, with the level higher on a 10-year view.
• Gross margin: Has improved gradually over time, reaching 36.3% in the most recent FY (2024).
• Operating margin: 9.86% in the most recent FY (2024). Improved from the early 2010s and has hovered around ~10% in recent years.
• Net margin: 7.40% in the most recent FY (2024).
• FCF margin (FY): 4.28% in the most recent FY (2024) (within the past 5-year range, but not at the high end).

What powered long-term growth (key points from Growth Attribution)

TSCO’s EPS growth has been driven mainly by revenue expansion, operating margin improvement and sustained strength, and a reduction in shares outstanding (a long-term decline in share count). For example, shares outstanding fell from 0.697bn in 2014 to 0.540bn in 2024.

Leverage history: the “backdrop” behind high ROE

In the most recent FY (2024), D/E is 2.39 and net debt/EBITDA is 2.70x, with leverage rising from 2019 to 2024. That makes it important to recognize that part of the high ROE can be amplified by the capital structure (a thinner equity base and the use of debt).

Lynch classification: which “type” TSCO most resembles

TSCO is most cleanly described as a “hybrid type (Fast Grower-leaning + Stalwart-leaning)”. The basis is 5-year CAGR in annual EPS of +17.0%, 5-year CAGR in annual revenue of +12.2%, and ROE (FY2024) of 48.5%.

A key caveat: the most recent TTM EPS growth rate is only +0.35%, which can make it look—if you focus only on the near term—like “growth has stalled.” Because the “long-term type” and “short-term performance” don’t always look the same, the next section treats short-term momentum separately.

Current execution: short-term momentum and whether the “type” is holding

This is the section that tends to map most directly to investment decisions. Bottom line, TSCO’s short-term momentum looks Decelerating. The reason is straightforward: growth in the two headline variables—EPS and revenue—now sits well below the average pace of the past 5 years.

The TTM “twist” in revenue, earnings, and cash

• EPS (TTM): 2.074, +0.35% YoY (essentially flat versus long-term double-digit growth).
• Revenue (TTM): approximately $15.399bn, +4.26% YoY (still growing, but slower than the long-term double-digit pace).
• FCF (TTM): approximately $0.952bn, +78.17% YoY (cash generation jumped).

Put differently, the current setup is “earnings and revenue are slowing, but cash generation is strong.” Some of these figures mix FY and TTM views, but that’s better understood as a time-window effect rather than a contradiction (for example, FCF looks weak on an FY basis but strong on a TTM basis).

Margin directionality (most recent 3 years, FY)

• Operating margin: FY2022 10.10% → FY2023 10.16% → FY2024 9.86%

Over the last three fiscal years, operating margin has stayed around ~10% but has drifted slightly lower. In retail, that kind of “gradual” move matters, and it ties directly to later topics like pricing actions, tariffs, logistics costs, and labor costs.

Financial soundness: what drives bankruptcy risk

TSCO is not a “cash-rich and conservative” balance sheet story; it’s a company that uses leverage and relies on execution. Bankruptcy risk can’t be summarized in a single sentence, but it’s easiest to organize by separating “debt load,” “ability to service interest,” and the “liquidity cushion.”

Debt and leverage

• D/E (FY2024): 2.39
• Net debt/EBITDA (FY2024): 2.70x

Leverage is on the higher side, and it’s hard to describe the company as having a large financial cushion.

Interest-paying capacity

• Interest coverage (FY2024): 26.88x

At the same time, interest coverage is strong, and at least based on reported figures, this is not a situation where the company appears “trapped by interest expense.”

Liquidity (cash cushion)

• Cash ratio (FY2024): 0.108

From the standpoint of absorbing short-term shocks, on-hand liquidity is not high. The best-fitting framing is: “strong interest-paying capacity, but financial flexibility (room to maneuver) can tighten quickly.”

Dividends and capital allocation: important, but not a “high-dividend stock”

Dividends matter for TSCO. But rather than being an income-first, high-yield equity, TSCO is better viewed as a name where dividends sit within a broader growth + total shareholder return framework.

Current dividend profile vs. “normal” levels

• Dividend yield (TTM): approximately 1.60% (assuming a share price of $49.83)
• DPS (TTM): $0.90754
• 5-year average yield: approximately 1.39%, 10-year average yield: approximately 1.12%

The current yield is somewhat above the 5-year and 10-year averages (with “higher” defined relative to TSCO’s own history).

Dividend burden (payout ratio and FCF coverage)

• Payout ratio (TTM, EPS-based): 43.76% (5-year average 33.69%, 10-year average 30.98%)
• Payout ratio (TTM, FCF-based): 50.77%
• FCF coverage (TTM): approximately 1.97x

The latest TTM payout ratio (EPS-based) is above historical averages, but it remains supported by earnings and FCF (i.e., it does not meaningfully exceed 100%). FCF coverage is about 1.97x—above 1.0x, but not so high that it implies an unusually large cushion.

Dividend growth track record

• Dividend continuity: 22 years
• Consecutive dividend increases: 14 years
• Most recent dividend cut that can be confirmed: 2010

TSCO has sustained dividends over a long period and built a meaningful streak of annual increases, but it’s also worth remembering that the record includes at least one interruption—this has not been a perfectly uninterrupted compounding story.

Recent dividend growth pace vs. current earnings growth

• DPS CAGR: +26.6% over the past 5 years, +21.9% over the past 10 years
• Most recent 1-year (TTM) dividend growth rate: +4.72%

Long-term dividend growth has been strong, but the most recent year is in the single digits. And with TTM EPS growth nearly flat at +0.35%, it’s reasonable to treat this as a backdrop that could influence the pace of dividend growth (this does not forecast future increases or cuts).

Notes on peer comparisons

TSCO is a specialty retailer, not a utility or telecom where high dividends are central to the model. With that context, a ~1% yield paired with a long dividend growth record can be framed as “dividends matter, but the stock isn’t owned solely for yield.” Quantitative peer comparisons (such as yield distributions) are not presented due to insufficient data on hand.

Where valuation stands today: positioning within TSCO’s own history

Rather than labeling TSCO “cheap” or “expensive” versus peers or the market, this section focuses on where TSCO sits within its own historical distribution. Price-based metrics assume a share price of $49.83 (as of the report date).

PEG (captures “low near-term growth” that P/E can miss)

• PEG (based on recent growth rate): 68.45x
• PEG (based on 5-year growth rate): 1.41x

The PEG based on recent growth is far above the typical range over the past 5 and 10 years and has also moved higher over the last 2 years. That’s largely a function of the very low recent EPS growth rate (TTM YoY +0.35%), which can cause PEG to spike. By contrast, using a 5-year growth rate produces a very different picture—making this a metric where time horizon drives a dramatically different “look”.

P/E (in range, but leaning toward the higher end)

• P/E (TTM): approximately 24.0x
• Past 5-year range (20–80% band): approximately 19.7x–25.6x

P/E remains within the typical range over the past 5 and 10 years; within the past 5 years it screens mid-to-somewhat-high, and the last 2 years have been roughly flat. In other words, while PEG has moved above its range, P/E has not.

Free cash flow yield (position within the range)

• FCF yield (TTM): 3.62%
• Past 5-year range (20–80% band): approximately 1.95%–6.13%

Over the past 5 years, it sits around the middle of the range (as a yield, modestly below the midpoint) and has been trending higher over the past 2 years. On a 10-year view, it screens somewhat higher within the range (more on the higher-yield side), again reflecting how the time window can change the read.

ROE (still high, but down over the past 2 years)

• ROE (FY2024): 48.51%

ROE is around the middle of the past 5-year range and toward the high end on a 10-year view. However, the direction over the past 2 years has been lower (with “high end” and “declining” defined relative to TSCO’s own historical distribution and recent trend).

FCF margin (TTM has moved above the past 5-year range)

• FCF margin (TTM): 6.18%

FCF margin has moved above the typical range of the past 5 years and has also been trending higher over the past 2 years. On a 10-year view, it sits toward the high end of the range—best summarized as “high, but not unprecedented for this business.”

Net Debt / EBITDA (inverse indicator): above the historical range

Net Debt / EBITDA is an inverse indicator, where a lower number (more negative) generally implies more cash and greater financial capacity.

• Net Debt / EBITDA (FY2024): 2.70x

This metric is above the typical range over the past 5 and 10 years and has also been trending higher over the past 2 years. Versus its own history, TSCO is currently in a “higher leverage” zone (this is not an investment conclusion—just a description of where the metric sits relative to its historical distribution).

Cash flow tendencies: how to reconcile EPS and FCF

Over the long run (annual), TSCO has produced strong EPS growth, while FCF has grown weakly over the past 5 years (CAGR +1.4%). Yet in the most recent TTM period, FCF rose sharply at +78.17% YoY.

At a minimum, this highlights that “earnings growth doesn’t always equal cash growth,” and that investment levels, inventory, and working capital can materially swing FCF. Even in the underlying sources, the current “earnings flat, cash strong” twist is flagged as something to break down through working capital, inventory, and capex movements; for long-term investors, it’s reasonable to treat this as a monitoring point tied to “quality.”

Why TSCO has won (the core of the success story)

TSCO’s underlying value proposition is that it operates as a retailer that’s closer to everyday infrastructure: in rural and suburban markets, customers can buy “what they need to keep daily life running” in one place, get it quickly, and even move heavy items.

• Consumables at the center: “Run-out” items like animal feed, bedding, and care products are foundational and help drive repeat trips.
• Strength in physical fulfillment: With stores as the base, TSCO can blend hold-for-pickup, pickup, and local delivery—creating an edge in categories where pure e-commerce struggles: “heavy, bulky, and time-sensitive.”
• Advice and immediacy: Being able to ask staff, source immediately, and take products home can be “hard to replace with price comparison alone.”

That said, TSCO isn’t as essential as a grocery store, and demand can be sensitive to lifestyle (suburban/country-leaning) and seasonality. It sits in the middle: “infrastructure-adjacent, but with demand swings.”

What customers value (Top 3)

• One-stop procurement efficiency: Customers can source what they need for animals, yards, and DIY in a single trip.
• Consumables availability: Easy replenishment of “run-out” items provides reassurance.
• Proximity and immediacy: Being nearby in suburban/rural areas is valuable in itself, and even heavy items can be taken home right away.

What customers are dissatisfied with (Top 3)

• Periods when price perception gets shaky: In highly competitive trade areas, price matching can become a focal point, and execution quality can shape the experience.
• Hit-or-miss on seasonal and large items: Weather and seasonal shifts make demand harder to forecast and can create disappointment when expectations aren’t met.
• Inconsistent in-store experience: Differences in staffing, training, and execution can create store-to-store variability (a common issue in store-based businesses in rural locations).

Is the story still intact: recent developments and narrative consistency (changes in the narrative)

TSCO’s strategy is anchored in “Life Out Here”: a defined target customer in suburban and rural markets, with stores, assortment, logistics, and digital integrated into one system. The playbook—drive trips with consumables, make heavy items easier to buy through delivery, and expand the pet vertical—remains consistent with the success story outlined above.

At the same time, recent results and messaging show a few notable “tilts.” Without labeling them good or bad, here are the shifts investors should be aware of.

• From “growth momentum” to “durability and underlying strength”: With revenue and earnings growth moderating while cash generation is strong, the narrative can shift from “high-growth” to “sticky/defensive.”
• Seasonality and weather move to the foreground: Weakness in seasonal categories is discussed at times, making weather a more prominent explanation for short-term volatility.
• Tariff uncertainty: References to higher tariff uncertainty entering 2025 make it easier for external factors to influence the sourcing, cost, and supply narrative.

Quiet Structural Risks: 8 things to watch most closely when it looks strong

This section is not about an “imminent crisis,” but about vulnerabilities that often show up first as small distortions in the numbers or in day-to-day execution. Because TSCO’s moat is a “bundle of field execution,” when it weakens it often does so gradually rather than dramatically—this is the key point.

• ① Concentration in customer dependence: Because it skews toward suburban/rural lifestyles, results can be influenced by shifts in regions, hobbies, and spending priorities. If weakness in seasonal and large items persists, it can show up as limited basket-size growth.
• ② Rapid shifts in the competitive environment: If peers move closer or large players improve delivery and the playing field converges, differentiation can narrow. Price matching can be defensive, but if it becomes the norm it can pressure gross margin and raise execution demands.
• ③ Commoditization: Feed and consumables are easy to compare, and differentiation spreads across inventory, proximity, advice, and delivery. If experience quality slips, it becomes harder to defend on the product itself.
• ④ Supply chain dependence: If costs and supply swing due to tariff uncertainty and other factors, it becomes harder to coordinate pricing, promotions, and inventory decisions.
• ⑤ Deterioration in organizational culture: Store-based advantages depend on people; if hiring, retention, and training weaken, variability in the customer experience can widen.
• ⑥ “Thin” decline in profitability: Operating margin has edged down over the past 3 years, and if price matching, tariffs, logistics costs, and labor costs overlap, margins can be shaved gradually over multiple quarters.
• ⑦ Financial burden as a “flexibility” constraint: Even with strong interest coverage, leverage and thin liquidity can reduce flexibility for investment, inventory, price competition, and labor spending.
• ⑧ Spillovers from industry structure: Agricultural conditions and the trade environment can spill into rural spending. The tariff backdrop can also indirectly pressure purchasing sentiment (no claim is made about the magnitude).

Competitive landscape: who it faces, where it wins, and where it can lose

TSCO doesn’t compete only with “farm specialty stores.” It competes across a broader field of specialty retail serving suburban and rural lifestyles. This is less about technological monopoly and more about execution across store footprint, logistics, inventory, and operations (people).

Key competitors (the opponent varies by category)

• Farm & ranch specialty peers: Rural King, etc. (where footprints overlap, head-to-head competition is more likely; store expansion can increase competitive density).
• Big-box home improvement: Lowe’s, Home Depot (overlap in tools, materials, seasonal categories, and large-item delivery).
• Mass merchants: Walmart (often competes on standardized consumables).
• Online pure-plays (especially in pets): Chewy (subscription food, expanding into pet meds and health).
• Pet specialty chains: Petco, PetSmart (touchpoints in supplies and services).
• General e-commerce: Amazon (raises expectations around price and delivery for standardized products).

Category-by-category win paths and where losses are more likely

• Consumables (feed, pet food, etc.): Comparison and substitution are common; price and subscriptions tend to matter. Switching costs can be low.
• Materials, tools, seasonal items: Assortment, in-stock reliability, same-day take-home, and large-item delivery are key battlegrounds, often versus home improvement retailers.
• Large and heavy items: Last-mile execution (damage, returns, quality) can be an advantage, but operational complexity is high.
• Pet medications (prescriptions, recurring purchases): The main battlefield is online workflows and subscription delivery, which naturally puts TSCO up against strong online pure-plays.
• Store openings and trade-area competition: Site quality, opening pace, and hiring can drive outcomes.

Investor observation points to read competition (the “meaning” of KPIs)

• Competitive density by trade area (peer openings, home improvement openings/remodels)
• Changes in pricing actions (price matching, discounting, promotion frequency)
• Stickiness of repeat purchases in consumables (including leakage to subscriptions)
• Delivery quality for heavy items (stockouts, damage, returns friction, lead times)
• Consistency of the in-store experience (staff retention, training, inventory/checkout/inquiry handling)
• Adoption of the pet pharmacy (prescription flow, recurring purchases, support quality)

The moat and its durability: “bundle execution” is the whole game

TSCO’s moat isn’t a single advantage like patents or user-driven network effects. It’s the following “bundle.”

• Store network in rural and suburban markets (proximity)
• Repeat purchases anchored in consumables (habit)
• Logistics and pickup workflows that can handle heavy items
• Field execution quality (inventory, service, pricing execution, staffing)

As a result, durability is less about “one unassailable edge,” and more about a system that is strong as long as the bundle is executed consistently. Conversely, if any component—pricing execution, inventory, service, delivery quality—slips, substitution can begin quietly through standardized consumables, which is a built-in fragility of the model.

Does TSCO get stronger in the AI era: separating tailwinds from headwinds

TSCO isn’t an AI provider (an “OS” company). It sits on the implementation side—using AI to improve store operations and the customer experience. In other words, AI isn’t something TSCO sells; it’s primarily a tool to tighten execution.

Areas where AI can be a tailwind (where it could get stronger)

• Store-floor support: The company has indicated the use of generative AI assistants and computer vision, which can help reduce operational strain in service, training, staffing, and checkout wait times.
• Data for operational improvement: Local purchase-behavior data—repeat buying, seasonality × region × weather, heavy-item purchase and delivery—can be used to improve precision in inventory, pricing, and staffing.
• Store network × logistics density: Not a user-to-user network effect, but a “quasi-network” where higher node density makes pickup, same-day availability, and delivery easier to sustain.

Areas where AI can be a headwind (where it could get weaker)

• Changes in the purchase entry point: As discovery shifts from search toward AI agents, comparison and selection can become more commoditized, increasing price pressure in standardized items (consumables, medications, etc.).
• Improvements that can be copied: AI-driven upgrades are unlikely to be proprietary; differentiation tends to come down to “speed and adoption in the field.”

Netting it out, AI is less likely to suddenly “take” TSCO’s revenue and more likely to show up as margin pressure in standardized categories. At the same time, if deployed well, it can reduce labor shortages, training costs, and store-level variability, potentially improving the durability of the bundled moat.

Management and culture: in a field-execution business, people are the biggest asset—and the biggest risk

TSCO’s management messaging emphasizes consistency: a defined customer profile around “suburban and rural living,” and an integrated bundle across stores, assortment, logistics, and digital. CEO Hal Lawton is described as pragmatic, with emphasis on supply chain, store execution, and durability—more focused on deepening proven playbooks than pursuing flashy new initiatives.

Governance / continuity considerations

• The CEO contract extension (through 2026) has been announced, suggesting an intention to avoid abrupt leadership change.
• Organizational changes such as a board chair transition have been described as steps that reinforce continuity in strategy execution.

Patterns that can be generalized from employee reviews (topics, not assertions)

• Often described positively: Consultative service that solves customer problems, and a stronger sense of purpose in more community-rooted settings.
• Often described negatively: Lean staffing, peak-season workload, and store-to-store differences in operational quality that can drive inconsistent customer experiences.

This goes directly to TSCO’s core. “The field” can be the moat, but cultural wear can increase variability in execution and lead to quiet leakage in consumables—an inherent risk in the model.

Is technology adoption aligned with the culture?

TSCO appears oriented toward using AI not to replace store associates, but to support them (training, customer response, smoothing checkout waits). In a period where profit growth is close to flat, it’s consistent to view this as tied to productivity initiatives that can help support margins (this is not intended as a definitive statement about the future).

Two-minute Drill: key points for long-term investors (the skeleton of the investment thesis)

Over the long term, TSCO’s core is straightforward: it serves as a “resupply hub” for suburban and rural consumers, supported by a bundle of store footprint, logistics, and on-the-ground execution. Consumables drive trips, heavy-item capability lifts basket size, and the pet vertical (supplies → medications) adds recurring demand. As long as that system keeps working, TSCO retains value that isn’t easily competed away by price comparison alone.

• Long-term type: On an annual basis, EPS and revenue have compounded at a double-digit CAGR, making TSCO look like a growth-tilted quality stock (hybrid type).
• Near-term wobble in the type: On a TTM basis, EPS +0.35% and revenue +4.26% point to deceleration and don’t match long-term “Fast Grower” expectations. Meanwhile, FCF has surged on a TTM basis.
• Competitive focus: Standardized consumables and pet medications are easy to compare, which raises the odds of price pressure. Outcomes hinge on whether TSCO can defend the physical advantage—heavy items, immediacy, local inventory, and advice.
• Less visible risks: Normalized price matching, wear in store operations, and external cost factors like tariffs that can “thinly” erode margins.
• How to view the balance sheet: Interest-paying capacity is substantial, but leverage and thin liquidity can constrain flexibility.
• Position in the AI era: AI can reduce field variability and reinforce the bundled moat, but it can also accelerate comparison in standardized items and pressure margins.

Understanding via a KPI tree: the causal structure that increases enterprise value

When following TSCO, it’s often more useful to view metrics through a cause-and-effect lens rather than in isolation.

What we ultimately want to increase (Outcome)

• Profit growth (including earnings per share)
• Growth in cash generation capacity
• Maintaining/improving capital efficiency (ROE, etc.)
• Sustaining shareholder returns (dividends and buybacks) without strain

Upstream drivers (Value Drivers)

• Revenue expansion (scale improves fixed-cost absorption and investment payback)
• Stickiness of demand in existing stores (repeat consumables purchases)
• Basket size (add-on items, bulk purchases, heavy-item purchases)
• Margin durability (gross margin and operating margin) (influenced by pricing actions, cost of goods, logistics costs, labor costs)
• Cash conversion quality (inventory and capex can swing cash even with the same profit)
• Utilization efficiency of the store network and logistics (execution capability in delivery and pickup)
• Financial flexibility (the combination of leverage and liquidity)

Bottleneck hypotheses (Monitoring Points)

• Whether the “earnings are hard to grow but cash is strong” twist persists (check the impact of inventory and investment)
• Whether pricing actions are becoming normalized (how gross margin is thinning)
• Whether consistency in the in-store experience is being maintained (hiring, retention, training)
• Whether heavy-item delivery quality is deteriorating (damage, returns friction, stockouts, lead times)
• The impact of weakness in seasonal categories on basket-size growth
• Whether pet medications and recurring purchases are taking hold (prescription flow and support quality)
• Whether external factors such as tariffs are disrupting operations through cost and supply volatility
• Whether financial flexibility is thinning (room to balance investment and shareholder returns)