Sound bite for Twitter and StockTwits is: Dividend Growth Industrial. Stock price is on the expensive side. The company gives a lot in stock options, but it is a techy sort of company. The stock options run around 2 to 3% per year and that is high. See my spreadsheet on TFI International Inc.
I own this stock of TFI International (TSX-TFII, 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. I bought this stock in 2017 because I liked the spreadsheet. It is a stock recommended my MPL Communications.
When I was updating my spreadsheet, I noticed they give out a lot of options. Insiders seem not to retain options so it appears that insider are selling lots of shares. The difference between the Basic and Diluted EPS is stock options.
This company was an income trust, so its dividends were higher as all income trust were. It cut its dividends when it became a corporation. It started to increase dividends again in 2011. The current dividend is moderate at 2.20%. The 5, 10 and historical median dividend yields are higher at 2.43, 2.52% and 3.56%. The median yield since the company became a corporation is 2.45%.
As you can see from the chart below, the dividends have been growing recently. The older ones are low to no grow because of the dividend cut in 2008 and 2009. The last dividend increase was for 14.3% and it occurred this year.
The Dividend Payout Ratios are good. The DPR for EPS for 2018 is 26% with 5 year coverage at 25%. The DPR for CFPS for 2018 is 11% with 5 year coverage at 13%.
Debt Ratios are fine. The Long Term Debt/Market Cap ratio for 2018 is fine at 0.48. The Liquidity Ratio is low at just 1.08. It is good when you add in cash flow after dividends as it becomes 1.80. This low Liquidity Ratio could be a vulnerability. The Debt ratio is good at 1.64. The Leverage and Debt/Equity Ratios at 2.57 and 1.57 are normal.
The Total Return per year is shown below for years of 5 to 27 to the end of 2018. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See charts below.
Total returns are now lower. This is mostly because of the lower dividends associated with this company’s move to a corporation. The dividends are going to be lower in the future to probably what has been happening in the past 5 years.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2013 | 5 | 10.07% | 9.36% | 6.92% | 2.43% |
| 2008 | 10 | 0.33% | 29.62% | 23.87% | 5.75% |
| 2003 | 15 | -2.02% | 16.49% | 9.11% | 7.38% |
| 1998 | 20 | -1.89% | 23.61% | 13.02% | 10.58% |
| 1993 | 25 | 22.81% | 14.64% | 8.17% | |
| 1991 | 27 | 17.77% | 12.39% | 5.38% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 13.58, 16.49 and 19.41. The corresponding 10 year ratios are 11.55, 14.34 and 17.22. The corresponding historical ratios are 8.84, 11.66 and 13.47. The current P/E Ratio is 12.14 based on a stock price of $43.58 and 2019 EPS estimate of $3.59. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a Graham Price of $37.69. The 10 year low, median, and high median Price/Graham Price Ratios are 0.82, 1.17 and 1.39. The current P/GP Ratio is 1.16 based on a stock price of $43.58. 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 Ratio of 2.05. The current P/B Ratio is 2.48 based on Book Value of $1,483M, Book Value per Share of $17.579 and a stock price of $43.58. The current ratio is some 21% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get an historical median dividend yield of 3.56% and a median dividend yield since the company has been a corporation at 2.45%. The current dividend yield is 2.20% based on dividends of $0.96 and a stock price of $43.58. The current yield is lower than both the historical at 38% lower and the median since a corporation at 10%. This stock price testing suggests that the stock price is relatively reasonable but above the median.
The 10 year median Price/Sales (Revenue) Ratio is 0.61. The current P/S Ratio is 0.69 based on 2019 Revenue estimate of $5,320, Revenue per Share of $63.06 and a stock price of $43.58. The current ratio is 14% above the 10 year median. This stock price testing suggests that the stock price is relatively reasonable but above the median.
Results of stock price testing is that the stock price is on the expensive side. I do not think you can ignore the P/S Ratio or P/B Ratio tests which point to a rather expensive stock price. The P/GP Ratio test is a good one and it points to a reasonable price but close to the median. The dividend yield test is not a good one because the company used to be an income trust. I do not particularly care for the P/E Ratio Test at any time.
When I look at analysts’ recommendations, I find Strong Buy (3), Buy (8), and Hold (3). The consensus would be a Buy. The 12 months stock price is $53.36. This implies a total return of 24.64% with 22.49% from capital gains and 2.20% from dividends.
See what analysts are saying about this stock on Stock Chase. It is not well covered, but analysts like the company. Joey Frenette on Motley Fool likes the company, but feels it will fall hard in a down market. A Writer on Simply Wall Street likes how this stock has grown lately. Another writer on Simply Wall Street thinks the stock has lots of positives. Andrew Sebastian on Finance Daily talks about recent analyst’s reports..
TFI International Inc is a transportation and logistics company domiciled in Canada. The company organizes itself into four segments: package and courier, less-than-truckload, truckload, and logistics. The package and courier segment picks-up, transports, and delivers items across North America. 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 Power Financial Corp (TSX-PWF, OTC-POFNF) ... learn more on Wednesday, May 08, 2019 around 5 pm. Tomorrow on my other blog I will write about Dividend Stocks May 2019.... learn more on Tuesday, May 07, 2019 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.
See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
I bought this stock in 2016 at $23.82 and continue to hold it my portfolio as a dividend growth investor.
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