TFI International Inc.

Sound bite for Twitter and StockTwits is: Dividend Growth Stock. I thought the price I paid was reasonable. I recently bought this stock to replace DH Corp which is being bought out. See my spreadsheet on TFI International Inc.

I own this stock of TFI International (TSX -TFII, OTC-TFIFF). As I recently said in my blog on Friday, I bought this stock to replace DH Corp stock. It is a stock recommended by MPL Communications. I rechecked my spreadsheet and liked the idea of buying this company. I started to follow this stock after 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.

This stock used to be an income trust. As such it dividends were quite high. The historical high is over 20%. When they became a corporation they reduced the dividends by 75%. As a corporation, they should be covering their dividends by earnings not the Funds from Operations (FFO) or Adjusted Funds from Operations (AFFO) which is the way to judge dividends for income trust companies.

The Dividend Payout Ratio for 2016 is 42% and the 5 year median DPR is also 42%. The DPR for cash flow is 14% with a 5 year DPR also at 14%. They can currently cover their dividends nicely. It was wise to reduce the dividends to a level where they could be covered. Since the dividends were reduced over 2008 and 2009, there is only two years that they did not raise the dividends. The 5 year dividend growth is 9.6%.

So currently this company has a moderate dividend (in the 2% range) and they have moderate dividend growth (in the 9% range). I know that some investors feel that dividend growth stocks should raise the dividends every year, but I do not have that requirement. I like to see dividends grow over time certainly.

In 2016 Revenues and Cash Flow was down, but earnings were up. The Liquidity Ratio is low at 1.10 and they need cash flow to get a good coverage for this ratio. The ratio for 2016 was 1.10. If you add in cash flow after dividends, the ratio is 1.57. The Debt Ratio is fine at 1.56. I like to see both this ratios are 1.50 or above.

The 5 year low, median and high median Price/Earnings per Share Ratios are 13.58, 16.46 and 19.41. The 10 year values are 11.53, 14.34 and 17.12. The historical values are 8.06, 10.79 and 13.43. The current P/E Ratio is 13.71 based on a stock price of $28.11. It appears that the part of the rise in stock price is due to increased P/E Ratios. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a Graham Price of $27.11. The 10 year low, median and high median Price/Graham Price Ratios are 0.80, 1.18 and 1.40. The current P/GP Ratio is 1.04 based on a stock price of $28.11. This stock price testing suggests that the stock price is relatively reasonable and below the median.

I get a 10 year Median Price/Book Value per Share of 1.96. The current P/B Ratio is 1.76 based on a stock price of $28.11 and BVPS of $15.93. The current P/B Ratio is some 10% lower than the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.

Since this is an old income trust company, you cannot use the historical median dividend yield for testing the stock price. The 5 year median dividend yield is 2.47%. The current dividend yield is 2.70% based on dividends of $0.76 and stock price of $28.11. The current dividend yield is some 9% higher than the 5 year median dividend yield. This stock price testing suggests that the stock price is relatively reasonable and below the median.

See what analysts are saying about this stock on Stock Chase. Barry Schwartz thinks the recent drop in price is a gift from the gods. This stock was recently recommended by The Money Reporter of MPL Communications. I do like investment publications of MPL Communications. I think that they dispense some of the best investment advice for Canadians.

When I look at analysts' recommendations I find Buy and Hold recommendations. Most the recommendations are a Hold and the consensus recommendations is a Hold. The 12 month stock price consensus is $34.00. This implies a total return of 23.66% with 20.95% from capital gains and 2.70% from dividends. This high return does not really match with the consensus recommendations.

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 TFI International Inc.

The last stock I wrote about was about was McCoy Global Inc. (TSX-MCB, OTC-MCCRF)... learn more. The next stock I will write about will be Reitmans (Canada) Ltd. (TSX-RET.A, OTC-RTMAF)... learn more on Friday May 12, 2017 around 5 pm. Tomorrow on my other blog I will write about If I knew then 5... learn more on Thursday, May 11 around 5 pm.

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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