Toromont Industries Ltd

I am reviewing this stock (TSX-TIH) today as I have received its annual report for 2008. I starting buying this stock at the end of 2007 and bought some more in 2008. To date I have lost some 8% per year on this stock. I do not intend to buy any more as I have enough of it. I, of course, expect to make money on this stock over the long term.

This stock is on the Dividend Achievers list at www.dividendachievers.com, and the Dividend Aristocrats list at www.tmxmoney.com/en/individual.html (see indices) and was also on Mike Higgs’ list. (Note that Mike Higgs’ has discontinued his list.) There are good reasons for this to be on dividend paying lists because it has raised it dividend some 21% annually over the past 5 years and 16% annually over the past 10 years. For the current year, it has only raised its dividend by 7%. There were other such lower dividend raises in the past and you can see this if you look at raises each year over the past 10 years.

This stock has had great growth in Revenues, Earnings, Dividends, Stock Prices, Cash Flow and Book Value over the last 5 and 10 years. That is for all growth measurements, this stock has had good growth. However, for all these growth measurements, the grow rates have slowed down for 2008 or is expected to slow for 2009. This is hardly surprising, as we are in a recession.

This stock has a strong balance sheet. The Liquidity Ratio is 1.90 and the Asset/Liability ratio is 2.03. These are both great figures. The Return on Equity (ROE) has been holding up quite well. The ROE for 2008 was 18% and this is slightly higher than the 5 year average of 17.7%. The Accrual Ratio is not significant at .51%.

As I said earlier, I expect to make money on this stock in the long term and I intend to hold on to what I have.

There are two sections to this company. The Equipment Group is for Caterpillar dealerships. The Compression Group designs, engineers, fabricates and installs compression systems for natural gas, fuel gas and carbon dioxide. This last group also has industrial and recreational refrigeration systems. Its web site is www.toromont.com. See my spreadsheet at www.spbrunner.com/stocks/tih.htm.

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 www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets.