Wednesday, April 24, 2013

Toromont Industries Ltd

On my other blog I am today writing about Investing Mistakes ...continue...

I own this stock of Toromont Industries Ltd. (TSX-TIH, OTC-TMTNF). This stock is complicated by the spin-off of Enerflex (TSX-EFX), which I sold, but for less than the spin off price. If I look at this company with Enerflex, I have a total return of 6.72% with 1.89% from dividends and 4.83% from capital gains. If I look just at this company I get a total return of 8.13% with 1.97% from dividends and 6.16% from capital gains.

I always like to talk about dividends and the dividend story on this stock is complicated by the Enerflex spin-off as dividends were decreased for Toromont Industries by the dividends to be paid by Enerflex. So this stock suffered a dividend decrease which leaves the dividends lower than what was paid in 2010. However, since this decrease, dividends were raised, the last raise being in 2013 at 8.3%.

The dividend is not bad at generally around 2% considering that the Dividend Payout Ratios are low. The 5 year median DPR for earnings is at 32% and the 5 year DPR for cash flow is at 25%. The current dividend yield is 2.35%.

The total return over the past 5 and 10 years is at 5.89% per year and 15.58% per year if we include Enerflex spin-off. The dividend portion of this return over the past 5 and 10 years is at 2.19% and 2.99% per year. The capital loss was at 5.68% per year over the past 5 years and the capital gain portion was at 7.40% per year over the past 10 years. The rest of the total return is related to the Enerflex spin off. However, I doubt that it was worth the spin-off price since it lost value immediately. However, the Enerflex stock did recover for those who have continued to hold it.

The outstanding shares have increased by 3.3% and 1.9% per year over the past 5 and 10 years. Shares have increased due to stock options and share issues and have decreased due to share buy backs.

Revenue has decreased by 4.6% per year and increased by 3.4% per year over the past 5 and 10 years. Revenue per Share has decreased by 7.6% per year and increased by 1.5% per year over the past 5 and 10 years. However, Revenue per Share has fared better looking at 5 year running averages and according to 5 year averages, Revenue per share has not changed over the past 5 years and is up by 6.4% per year over the past 10 years.

Earnings per Share is down by 3.7% per year and up by 9.3% per year over the past 5 and 10 years. EPS also looks better if taken from the 5 year running averages, where is has increased by 4.2% per year and 10.4% per year over the past 5 and 10 years.

Cash Flow per share shows the same sort of activity as it is down by 7.5% over the past 5 and has not change over the past 10 years, but the 5 year running increases over the past 5 and 10 years is at 2.5% and 6.6% per year.

The Return on Equity for 2012 is at 25.3% and the 5 year median ROE is at 18%. The ROE based on comprehensive income is at 24.3% and this is only 4% off the ROE on net income.

One good thing about this company is the strong balance sheet. The Liquidity Ratio for 2012 is at 2.15and the current one is 2.25. The Debt Ratio for 2012 is 2.04 and the current one is 2.08. The Leverage and Debt/Equity Ratios are also good with current ones at 1.92 and 0.92.

Since this is an industrial stock, it has not done badly in the current economic situation. The best thing about the stock is that it has a strong balance sheet. I bought this stock for diversifications and it is still a good hold for this reason. See my spreadsheet at tih.htm.

There are two sections to this company. The Equipment Group is for Caterpillar dealerships. CIMCO is a market leader in the design, engineering, fabrication and installation of industrial and recreational refrigeration systems. Its web site is here Toromont.

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 for stocks followed and investment notes. Follow me on Twitter or StockTwits.

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