I own this stock of TFI International Inc (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.
When I was updating my spreadsheet, I noticed I have done very well with this stock earning a total return over the past 3.7 years of 39.87% with 38.00% from capital gains and 1.87% from dividends. Also, this year, this stock started to report in US$, but the dividend is still in CDN$.
The dividend yields are low with dividend growth moderate. The current dividend yield is low (under 2%) at 1.25%. The 5,10 and historical dividend yields are moderate (2% to 4% ranges) at 2.42%, 2.43% and 3.13%. The dividend growth is moderate (8% to 14% ranges) at 8.9% per year over the past 5 years. The last dividend increase was for 11.5% and it was done in 2021.
The Dividend Payout Ratios (DPR) are good. The DPR for EPS for 2020 was 27% with 5 year coverage at 22%. The DPR for CFPS for 2020 is 11% with 5 year coverage at 12%. The DPR for Free Cash Flow for 2020 is 14% with 5 year coverage at 26%. With fast growing companies, it is good to have low DPRs so the company can reinvest in the company.
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2020 is 0.17 and the Long Term Debt can be paid off in the current cash flow in 1.4 years. The Liquidity Ratio is for 2020 is 1.00. If you add in Cash Flow after dividends, it is 1.81. The Debt Ratio for 2020 is 1.87. The Leverage and Debt/Equity Ratios for 2020 is 2.15 and 1.15.
The Total Return per year is shown below for years of 5 to 30 to the end of 2020. 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 chart below.
Note: This company was an income trust between 2002 and 2008. They started to pay dividends in 2002 and at a high rate as most income trusts did. When they became a corporation in 2009, they cut the dividends by 75%. This accounts for the inconsistencies in the dividend growth and dividend part of the Total Returns.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2015 | 5 | 8.87% | 25.06% | 22.65% | 2.41% |
| 2010 | 10 | 10.03% | 20.59% | 17.96% | 2.63% |
| 2005 | 15 | -1.37% | 12.54% | 9.39% | 3.15% |
| 2000 | 20 | -0.51% | 49.30% | 20.03% | 29.27% |
| 1995 | 25 | 30.73% | 18.94% | 11.79% | |
| 1990 | 30 | 18.34% | 13.84% | 4.50% |
The 5 year low, median, and high median Price/Earnings per Share Ratios are 8.89, 12.11 and 15.04. The corresponding 10 year ratios are 9.38, 12.16 and 16.45. The corresponding historical ratios are 8.84, 11.66 and 13.47. The current P/E Ratio is 19.94 based on a stock price of $92.71 and EPS estimate for 2021 of $4.63 (3.69 U$). This stock price testing suggests that the stock price is relatively expensive. This is in CDN$
I get a Graham Price of $50.28. The 10 year low, median, and high median Price/Graham Price Ratios are 0.84, 1.05 and 1.39. The current P/GP Ratio is 1.84 based on a stock price of $92.71. This stock price testing suggests that the stock price is relatively expensive. This is in CDN$.
I get a 10 year median Price/Book Value per Share Ratio of 2.14. The current P/B Ratio is 3.84 based on a Book Value of $2,256M, Book Value per Share of $24.16 and a stock price of $92.71. The current ratio is 80% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This is in CDN$.
I get a 10 year median Price/Cash Flow per Share Ratio of 6.14. The current P/CF Ratio is 9.37 based on Cash Flow per Share estimate for 2021 of $9.89 ($7.85 US$), Cash Flow of $924M and a stock price of $92.71. The current P/CF Ratio is 53% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This is in CDN$.
I get an historical median dividend yield of 3.13%. The current dividend yield is 1.25% based on a stock price of $92.71 and dividends of $1.16. The current dividend yield is 60% below the historical dividend yield. This stock price testing suggests that the stock price is relatively expensive. This is in CDN$.
I get a 10 year median dividend yield of 2.43%. The current dividend yield is 1.25% based on a stock price of $92.71 and dividends of $1.16. The current dividend yield is 48% below the 10 year dividend yield. This stock price testing suggests that the stock price is relatively expensive. This is in CDN$.
The 10 year median Price/Sales (Revenue) Ratio is 0.63. The current P/S Ratio is 1.11 based on Revenue estimate for 2021 of $7,801M ($6,190M US$), Revenue per Share of $83.53 and a stock price of $92.51. The current P/S Ratio is 75% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive. This is in CDN$.
Results of stock price testing is that the stock price is probably expensive. Both the dividend yield tests are showing the stock as expensive and it is confirmed by the P/S Ratio test. All the tests are showing the current stock price as expensive in all the stock tests.
For this stock to have a current P/S Ratio near the 10 year median, the stock price would need to be $53.00 CDN$. That is 42.8% lower. The current P/S Ratio would then be at the 10 year median P/S Ratio. At that price the current P/E Ratio would be 11.40, which is below the 10 year median P/E Ratio of 11.66. It would not pass the Historical median dividend yield test as the dividend would be 2.19% and that is still be 30% lower than the Historical median dividend yield of 3.13%, but it would show a reasonable price for the 10 year median dividend yield as it would be just 9.8% below the 10 year median dividend yield of 2.43%. This is the beauty of spreadsheets as it is easy to test out such things.
Is it a good company at a reasonable price? Unfortunately, the current stock price is expensive. I am pleased to have invested in this company as I think it is a good company. It is a dividend growth company. However, I would not buy more at the current price. Also, I do have enough of this company as a percentage of my portfolio.
When I look at analysts’ recommendations, I find Strong Buy (7), Buy (10) and Hold (2). The consensus would be a Buy. The 12 month consensus stock price is $105.76 ($83.92 US$). This implies a total return of 15.33% with 14.08% from capital gains and 1.25% from dividends.
The last two entries on Stock Chase are Top Pick and Buy. I do not understand the comment by Ross Healy as stock is at an all-time high. Joey Frenette on Motley Fool thinks this is a good stock to build a pension plan in your TFSA. The Executive Summary at Simply Wall Street gives this stock 4 stars out of 5. A writer on Simply Wall Street finds this stock interesting. Barry Schwartz talks about this stock on BNN Bloomberg. The Fire Grind talks about this stock on YouTube.
The All Risk Checks section of the Executive Summary at Simply Wall Street is interesting on Simply Wall Street. They list 4 risks on the Executive Summary. I do not think that the current debt level is a problems and insider selling is basically the insiders not taking up options. In the past year, both the CEO and CFO have increased their holdings. The Chairman has not changed his holdings over the past year.
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. TFI International derives the majority of revenue domestically, followed by the United States. Its web site is here TFI International Inc .
The last stock I wrote about was about was Atrium Mortgage Investment Corp (TSX-AI, OTC-AMIVF) ... learn more. The next stock I will write about will be IGM Financial Inc (TSX-IGM, OTC-IGIFF) .... learn more on Friday, March 5, 2021 around 5 pm. Tomorrow on my other blog I will write about Something to Buy March 2021.... learn more on Thursday, March 4, 2021 around 5 pm.
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