Is it a good company at a reasonable price? This is a company that keeps showing up on the annual Money Sense list of 100 Best Canadian Dividend stocks. This is the sort of company to buy and hold, probably forever. I have no intentions of selling it. However, I think that the price is on the expensive side, so not a time to buy.
I own this stock of Toromont Industries Ltd (TSX-TIH, OTC-TMTNF). This is one of the stocks I bought after selling Loblaws in 2008. This was a stock on Mike Higgs' Canadian Dividend Growth Stock list. I bought more in 2008 after selling Onex and AGF Management.
When I was updating my spreadsheet, I noticed I have done very well in this stock. I have made several purchases in different accounts. My total return to the end of December 2025 is 14.42% per year over the past 18 years. I have 12.24% from capital gains and 2.18% from dividends. (I have only updated my Quicken to the end of December as I have been busy.) I have dividends of 13% on my original purchase in 2007. That is why I like dividend growth stocks.
If you had invested in this company in December 2015, for $1,009.60 you would have bought 32 shares at $31.55 per share. In December 2025, after 10 years you would have received $416.32 in dividends. The stock would be worth $5,315.60. Your total return would have been $5,729.92. This would be a total return of 19.93% per year with 18.07% from capital gain and 1.86% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $31.55 | $1,009.60 | 32 | 10 | $416.32 | $5,313.60 | $5,729.92 |
The current dividend yield is low with dividend growth moderate. The current dividend yield is low at 1.09%. The 5, 10 and historical median dividend yields are also low are 1.47%, 1.51% and 1.67%. The dividend growth is moderate (8% to 14% ranges) at 11.2% per year over the past 5 years. The last dividend increase was low (under 8%) at 7.7%. They sometimes raise the dividend more than once in a year, but dividend increases have declined as dividend increase in 2020 was 15.4% and in 2025 was 9.1%.
The Dividend Payout Ratios (DPR) are good. The DPR for 2025 for Earnings per Share (EPS) is good at 34% with 5 year coverage at 30%. The DPR for 2025 for Adjusted Earnings per Share (AEPS) is good at 25% with 5 year coverage at 22%. The DPR for 2025 for Cash Flow per Share (CFPS) is good at 21% with 5 year coverage at 21%. The DPR for 2025 for Free Cash Flow (FCF) is good at 39% with 5 year coverage at 36%. There is two FCF values given for 2025 of $430M, and $458M. I am using the $430M value.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 33.61% | 29.98% |
| AEPS | 24.56% | 22.03% |
| CFPS | 21.28% | 21.15% |
| FCF | 38.58% | 36.13% |
Debt Ratios are good. The Long Term Debt/Market Cap Ratio for 2025 is good at 0.06 and currently at 0.05. The Liquidity Ratio for 2025 is good at 2.93 and 2.93 currently. The Debt Ratio for 2025 is good at 2.51 and 2.51 currently. The Leverage and Debt/Equity Ratios for 2025 are good at 1.66 and 0.66 and currently at 1.66 and 0.66.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.06 | 0.05 |
| Intang/GW | 0.03 | 0.03 |
| Liquidity | 2.93 | 2.93 |
| Liq. + CF | 3.45 | 3.55 |
| Debt Ratio | 2.51 | 2.51 |
| Leverage | 1.66 | 1.66 |
| D/E Ratio | 0.66 | 0.66 |
The Total Return per year is shown below for years of 5 to 35 to the end of 2025. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2020 | 5 | 11.20% | 14.69% | 13.23% | 1.46% |
| 2015 | 10 | 11.95% | 19.93% | 18.07% | 1.86% |
| 2010 | 15 | 11.98% | 17.41% | 15.61% | 1.79% |
| 2005 | 20 | 12.43% | 14.05% | 12.57% | 1.48% |
| 2000 | 25 | 12.91% | 16.59% | 14.72% | 1.87% |
| 1995 | 30 | 13.74% | 17.52% | 15.40% | 2.12% |
| 1990 | 35 | 14.40% | 22.56% | 18.61% | 3.95% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 17.97, 20.09, 22.59. The corresponding 10 year ratios are 17.61, 20.08, 22.42. The corresponding historical ratios are 13.80, 15.68, 18.94. The current P/E Ratio is 27.77 based on a stock price of $204.93 and EPS estimate for 2026 of $7.38. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I also have Adjusted Earnings per Share (AEPS) Data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 13.13, 15.08 and 16.53. The corresponding 10 year ratios are 12.95, 15.44 and 17.52. The corresponding historical ratios are 12.95, 15.17 and 16.70. The current P/AEPS Ratio is 29.70 based on a stock price of $204.93 and AEPS estimate for 2026 of $6.90. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I get a Graham Price of $79.20. The 10-year low, median, and high median Price/Graham Price Ratios are 1.29, 1.59 and 1.82. The current P/GP Ratio is 2.59 based on a stock price of $204.93. The current ratio is above the high ratio of the 10 year median ratios. This stock price testing suggests that the stock price is relatively expensive.
I get a 10-year median Price/Book Value per Share Ratio of 3.51. The current P/B Ratio is 5.07 based on a Book Value of $3,290.5M, Book Value per Share of $40.40 and a stock price of $204.93. The current ratio is 45% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get a 10-year median Price/Cash Flow per Share Ratio of 16.45. The current P/CF Ratio is 19.30 based on Cash Flow per Share estimate for 2026 of $10.62, Cash Flow of $865M and a stock price of $204.93. The current ratio is 17% above the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get an historical median dividend yield of 1.67%. The current Dividend Yield is 1.09% based on a stock price of $204.93 and dividends of $2.24. The current Dividend Yield is 35% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.
I get a 10 year median dividend yield of 1.51%. The current Dividend Yield is 1.09% based on a stock price of $204.93 and dividends of $2.24. The current Dividend Yield is 28% below the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively expensive.
The 10-year median Price/Sales (Revenue) Ratio is 1.85. The current P/S Ratio is 3.01 based on Revenue estimate for 2026 of $5,541M, Revenue per Share of $68.03 and a stock price of $204.93. The current ratio is 63% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
Results of stock price testing is that the stock price is testing as expensive. The dividend yield tests are saying that the stock price is relatively expensive. This is confirmed by the P/S Ratio test. Almost all the other tests, except for the P/CF Ratio test, is saying that the stock price is relatively expensive.
When I look at analysts’ recommendations, I find Strong Buy (3), Buy (3) and Hold (3). The consensus is a Buy. The 12 month stock price consensus is $207.89 with a high of $230.00 and low of $180.00. The consensus stock price of $207.89 implies a total return of 2.54% with 1.44% from capital gains and 1.09% from dividends based on a current stock price of $204.93.
Analyst on Stock Chase in 2025 generally liked this stock, but one found it too expensive currently and another said that the numbers from the last report were good, but not great. Amy Legate-Wolfe on Motley Fool says to buy simple, real-economy business like this one. Brian Paradza on Motley Fool says to buy stocks that can weather any economic storm, like this company. The company put out a Press Release about their fourth quarter of 2025.
Simply Wall Street via Yahoo Finance reviews this stock and think it is a strong income stock. Simply Wall Street gives this stock 2 and one half stars. They have no warnings out on this stock.
Toromont Industries Ltd is a Canadian industrial company. The company operates two business segments: Equipment Group and CIMCO. The company operates majorly in Canada and derives a smaller portion of sales from the United States of America and other regions. Its web site is here Toromont Industries Ltd.
The last stock I wrote about was about was Allied Properties Real Estate Investment Trust (TSX-AP.UN, OTC-APYRF) ... learn more. The next stock I will write about will be Intact Financial Corp (TSX-IFC, OTC-IFCZF) ... learn more on Monday, February 23, 2026 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
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