TransForce Inc.

On my other blog I am today writing about the presentation at the World Money Show in Toronto by BNN Presents.

I do not own this stock of TransForce Inc. (TSX-TFI, OTC-TFIFF). I read a report called "6 Canadian Dividend Stocks That Fly Under the Radar" by John Heinzl in April of 2013. This is one of the stocks mentioned. There was also a good review of this stock by Advice Hotline by MPL Communications.

Company was an income trust from 2002 to 2008. When it changed to a corporation it dropped monthly distributions for quarterly distributions and dividends dropped almost 75%. Dividends were level in 2010 but since then dividends have been increasing. The median dividend increase from 2011 to 2014 is 9.5%. The last dividend increase was in 2014 and it was for 11.5%.

So for this dividend growth company you have a good dividend and good increases. The current dividend is 2.1% and the 5 year median dividend yield is 3.3%. Last dividend increase was 11.5% as pointed out above. Current dividend increasing at 11.5% a year will give you a yield on an investment today of 6.2% and 10.7% in 10 and 15 years' time.

The 5 year median Dividend Payout Ratios for EPS is 40.6% and the CFPS is $17.4%. The corresponding DPRs for 2013 are 79% for EPS and 25% for CFPS. Earnings were low in 2013. EPS was just $0.66. However, they provide an adjusted EPS figure of $1.26. The adjusted figure is stripped of items that are not in the Company's normal business.

Shareholders have done well lately with the 5 and 10 years total return at 30.64% and 11.74% per year. The dividend portion of this return is at 3.65% and 5.56% per year over these periods. The capital gain portion of this return is at 26.99% and 6.18% per year over these periods.

The outstanding shares have increased by 1.5% and 3.9% per year over the past 5 and 10 years. Revenue growth is from good to very good. Earnings growth has been negative and cash flow growth is negative over the past 5 years but good over the past 10 years.

Revenue is up by 5.5% and 15.3% per year over the past 5 and 10 years. Revenue per Share is up by 5% and 10.9% per year over the past 5 and 10 years. EPS is down by 6.4% and 0.9% per year over the past 5 and 10 years. Cash Flow per Share is down by 3.6% and up by 5.8% per year over the past 5 and 10 years.

If you use the Adjusted EPS, then Earnings have good growth over the past 5 and 10 years. Analysts expect good earnings growth for 2014, but we are half way through the years and EPS over the past 6 months is lower than EPS over the same period last year. This is considered an industrial stock and so you would expect some volatility in earnings because of this.

As far as cash flow goes, analysts also expect good growth in 2014. For the second quarterly report cash flow is indeed up. If you compare the 12 month period to the end of December 2013 to the 12 month period to the end of June 2014, cash flow is up by 15%.

The Return on Equity was below 10% 3 times in the last 10 years and 2 times in the last 5 years. The ROE was just 7.9% for 2013. However, the 5 year median ROE is healthy at 14.9%. The ROE on comprehensive income for 2013 was strong at 12.2%. The 5 year median ROE on comprehensive income was 14.7%.

The debt ratios are ok. The Liquidity Ratio is a bit low at 1.39 but if you add in cash flow after dividends it is 1.94. The Debt Ratio is good at 1.62. The Leverage and Debt/Equity Ratios are a bit high but ok at 2.61 and 1.61.

Sound bit for Twitter and StockTwits is: Industrial dividend growth stock. See my spreadsheet at tfi.htm.

This is the first of two parts. The second part will be posted on Friday, October 31, 2014 and will be available here. The first part talks about the stock and the second part talks about the stock price.

TransForce Inc. is a North American leader in the transportation and logistics industry operating across Canada and the United States through its subsidiaries. TransForce companies service the following segments: Package and Courier; Less-Than-Truckload; Truckload, which includes specialized truckload and dedicated services; Specialized Services, which includes services to the energy sector, waste management, logistics and ancillary transportation services. Its web site is here TransForce.

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. 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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