Wednesday, February 18, 2009

Finning International Inc.

I am reviewing this stock today (TSX-FTT) as it is a stock I follow. This is also a dividend paying stock and it is on is on the Dividend Achievers list at I do not own any of this stock as the company is quite similar to Toromont, which I do own.

All my following figures are for the year ending at the last annual statement of December 2007 as the report for 2008 is not yet out. First, what I find good about this stock. Revenue growth for the last 5 and 10 years was 12% and 9.3%. The Earnings per Share (EPS) growth for the last 5 and 10 years was 12.7% and 9%. The Dividend growth for the last 5 and 10 years was 19% and 13.6%. The Closing Price growth for the last 5 and 10 years was 18.9% and 13%. The Book Value growth for the last 5 and 10 years was not bad at8.99% and 7.7%.

The Asset/Liability Ratio is good at 1.64; however, the Liquidity is low at 1.30. It is desirable that both these ratios be 1.50 or higher. The Return on Equity (ROE) for 2007 and the average for the last 5 years is 17.% and 12.9% and these figures are not bad. The Accrual Ratio at 3.71% is not bad.

The main problem I see with stock is the lack of consistency and lack of growth in the cash flow. Growth and consistency in the cash flow is more important than in the EPS. It also has low liquidity figure and this is not good in a bear market. Tomorrow, I will review the latest quarterly report and look what stock analysts are saying about this stock.

This company sells, rents and provides customer support services for Caterpillar equipment and engines. They cover Canada, UK, Argentina, Bolivia, Chile and Uruguay. Its web site is See my spreadsheet on this company at

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website at for a list of the stocks for which I have put up spreadsheets on my web site.

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