Monday, April 20, 2015

Toromont Industries Ltd.

On my other blog I am today writing about Ben Bernanke's Blog continue...

Sound bite for Twitter and StockTwits is: Industrial dividend growth stock. The returns have been reasonable and they have been growing the dividend. Revenue and EPS has grown over the past 3 years and cash flow over the past 2 years. See my spreadsheet at tih.htm.

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.

This is a dividend growth Industrial stock. The dividend yield is moderate as is the dividend increases. The current dividend is 2.02% and the 5 year median dividend yield is 2.16%. The dividend growth over the past 10 years is 8.4% per year and over the past 20 years is 14.3% per year.

I am showing a 5 year growth of 0% because I am treating the spin-off of Enerflex in 2011 as a special dividend rather than a spin off. The problem with Enerflex is that Toromont did not have it for very long, only from January 20, 2010 to June 1, 2011. Basically, I treating the money I got from it as a special dividend payment. I sold Enerflex as soon as I could and sold for less than the spin off price.

This company says that they have paid dividends every year since going public in 1968 and have raised their dividends every year since 1988. I have history on this stock back to 1992 and my historical median dividend yield is 1.85%.

Including my Enerflex spin-off, I have made a total return of 9.70% per year on this stock. The portion of this return attributable to dividends is 1.96% per year and the portion of this return attributable to capital gains is 7.74% per year. The 5 and 10 years total return is at 11.48% and 8.12% per year.

The outstanding shares have increase by 3.6% and 2.1% per year over the past 5 and 10 years. This will make the per share growth data more important to me. There is little to no growth in revenue, no growth to moderate growth in EPS and no growth to moderate growth in Cash Flow over the past 5 and 10 years.

Revenue is down by 1.9% and up by 1.1% per year over the past 5 and 10 years. Revenue per Share is down by 5.2% and 0.9% per year over the past 5 and 10 years. EPS is down by 1.7% and up by 4.6% per year over the past 5 and 10 years. Cash Flow is up by 1% and 5.6% per year over the past 5 and 10 years while CFPS is down by 2.5% and up by 3.5% per year over the past 5 and 10 years.

The Return on Equity has not been below 10% once during the last 10 years. The ROE at 2014 is 19.9% and with a 5 year median of 21.3%. The ROE on comprehensive income is 19.3% for 2014 and the 5 year median is at 22.8%. So basically, the comprehensive income suggests that the net income is of good quality.

All the debt ratios are good. The Liquidity Ratio is 1.73 in 2014. The Debt Ratio is 2.52 in 2014. The Leverage and Debt/Equity Ratios are 1.66 and 0.66.

This is the first of two parts. The second part will be posted on Tuesday, April 21, 2015 and will be available here. The first part talks about the stock and the second part talks about the stock price.

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. 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.

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

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