Is it a good company at a reasonable price? Personally, I am still pleased with this company. I do not plan to buy more, but I will keep what I have. Since I live off my dividends, I do not have much in the way of cash to do much in the way of investing. The stock price still seems to be in a reasonable area, but it is at the top of the reasonable range.
I own this stock of Toromont Industries Ltd (TSX-TIH, OTC-TMTNF). This was a stock on Mike Higgs' Canadian Dividend Growth Stock list. This is one of the stocks I bought after selling Loblaws in 2008. I bought more in 2008 after selling Onex and AGF Management.
When I was updating my spreadsheet, I noticed I have done well with this stock. I have had it for 16 years and have earned a total return of 13.74% with 12.02% from capital gains and 1.72% from dividends. Over the past 15 years, dividends have grown 11.2% per share from $.34 to $1.68 per share.
In the chart below, I am showing 5 and 10 year total growth and per year growth in columns 3 and 4. Column 5 shows growth expected over 12 months to the first quarter in 2024 and expected growth over the next year. This shows good growth generally except in the last 5 years for Cash Flow, although cash flow is expected go grow well over the next year by some 90%
| Yr | Item | Tot. Gwth | Per Year | Gwth | Coverage |
|---|---|---|---|---|---|
| 5 | Revenue Growth | 31.91% | 5.69% | 0.54% | <-12 mths |
| 5 | EPS Growth | 110.10% | 16.01% | -0.93% | <-12 mths |
| 5 | Net Income Growth | 112.20% | 16.24% | 16.87% | <-12 mths |
| 5 | Cash Flow Growth | -29.71% | -6.81% | ||
| 5 | Dividend Growth | 90.91% | 13.81% | 11.31% | <-12 mths |
| 5 | Stock Price Growth | 113.97% | 16.43% | 14.98% | <-12 mths |
| 10 | Revenue Growth | 190.08% | 11.24% | 3.87% | <-this year |
| 10 | EPS Growth | 305.66% | 15.03% | 1.77% | <-this year |
| 10 | Net Income Growth | 334.62% | 15.83% | 3.51% | <-this year |
| 10 | Cash Flow Growth | 77.42% | 5.90% | 90.83% | <-this year |
| 10 | Dividend Growth | 229.41% | 12.66% | 14.29% | <-this year |
| 10 | Stock Price Growth | 335.65% | 15.85% | 14.98% | <-this year |
If you had invested in this company in December 2013, for $1,012.70 you would have bought 38 shares at $26.65 per share. In December 2023, after 10 years you would have received $392.92 in dividends. The stock would be worth $4,411.80. Your total return would have been $4,804.72. This would be a total return of 17.75% per year with 15.85% from capital gain and 1.89% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $26.65 | $1,012.70 | 38 | 10 | $392.92 | $4,411.80 | $4,804.72 |
The current dividend yield is low with dividend growth moderate. The current dividend yield is low (below 2%) at 1.47%. The 5, 10 and historical dividend yields are also low at 1.54%, 1.58% and 1.69%. The current dividend growth is moderate (8% to 14% ranges) at 13.8% per year over the past 5 years. The last dividend increase was in 2024 and it was for 11.6%.
The Dividend Payout Ratios (DPR) are mostly good. The DPR for 2023 for Earnings per Share (EPS) is good at 26% with 5 year coverage at 30%. The DPR for 2023 for Adjusted Earnings per Share (AEPS) is good at 20% with 5 year coverage at 22%. The DPR for 2023 for Cash Flow per Share (CFPS) is good at 20% with 5 year coverage at 21%. The DPR for 2023 for Free Cash Flow (FCF) is high at 69% with 5 year coverage at 45%.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 26.05% | 30.04% |
| AEPS | 19.68% | 21.51% |
| CFPS | 19.64% | 20.97% |
| FCF | 69.32% | 45.45% |
Debt Ratios are good. The Long Term Debt/Market Cap Ratio for 2023 is good at 0.07 and currently at 0.06. The Liquidity Ratio for 2023 is good at 2.65 and 2.64 currently. The Debt Ratio for 2023 is good at 2.42. The Leverage and Debt/Equity Ratios for 2023 are good at 1.70 and 0.70.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.07 | 0.06 |
| Intang/GW | 0.05 | 0.04 |
| Liquidity | 2.64 | 2.64 |
| Liq. + CF | 2.84 | 3.13 |
| Debt Ratio | 2.42 | 2.42 |
| Leverage | 1.70 | 1.70 |
| D/E Ratio | 0.70 | 0.70 |
The Total Return per year is shown below for years of 5 to 33 to the end of 2023. 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.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2018 | 5 | 13.81% | 18.25% | 16.43% | 1.82% |
| 2013 | 10 | 12.66% | 17.75% | 15.85% | 1.89% |
| 2008 | 15 | 11.17% | 17.08% | 15.10% | 1.98% |
| 2003 | 20 | 13.71% | 14.71% | 12.97% | 1.73% |
| 1998 | 25 | 12.97% | 15.37% | 13.57% | 1.80% |
| 1993 | 30 | 15.65% | 18.80% | 16.20% | 2.59% |
| 1990 | 33 | 14.66% | 22.61% | 18.55% | 4.06% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 17.58, 20.09, 22.59. The corresponding 10 year ratios are 16.45, 18.76 and 22.04. The corresponding historical ratios are 13.36, 15.33 and 18.76. The current P/E Ratio is 19.88 based on a stock price of $130.50 and EPS estimate for 2024 of $6.56. The current ratio is between the median and high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 12.03, 14.62 and 16.44. The corresponding 10 year ratios are 12.95, 15.74 and 17.70. The current P/AEPS Ratio is 15.35 based on a stock price of $130.50 and AEPS estimate for 2024 of $8.50. The current ratio is between the median and high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a Graham Price of $78.97. The 10-year low, median, and high median Price/Graham Price Ratios are 1.31, 1.58 and 1.80. The current P/GP Ratio is 1.65 based on a stock price of $130.50. The current ratio is between the median and high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10-year median Price/Book Value per Share Ratio of 3.47. The current P/B Ratio is 4.00 based on a stock price of $130.50, Book Value of $2684M and Book Value per Share of $32.61. The current ratio is 15% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10-year median Price/Cash Flow per Share Ratio of 16.45. The current P/CF Ratio is 15.82 based on Cash Flow per Share estimate for 2024 of $8.25, Cash Flow of $6789M and a stock price of $130.50. The current ratio is 4% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get an historical median dividend yield of 1.69%. The current dividend yield is 1.47% based on dividends of $1.87 and a stock price of $130.50. The current dividend yield is 13% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get an historical median dividend yield of 1.58%. The current dividend yield is 1.47% based on dividends of $1.87 and a stock price of $130.50. The current dividend yield is 7% below the historical median dividend yield. 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 1.61. The current P/S Ratio is 2.24 based on Revenue estimate for 2024 of $4,801M, Revenue per Share of $58.34 and a stock price of $130.50. The current ratio is 39% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
Results of stock price testing is that the stock price could be still reasonable, but in the top of the reasonable range. The P/S Ratio testing does not support this and suggests that the stock price is expensive, but it is the only test to suggest this. Most of the rest of the testing says that the stock price is reasonable, but above the median.
When I look at analysts’ recommendations, I find Strong Buy (3), Buy (3), and Hold (3). The consensus would be a Buy. The 12 month stock price consensus is $135.80 with a high of $145.00 and low of $125.00. The consensus price of $135.80 implies a total return of 5.53% with 4.06% from capital gains and 1.47% from dividends.
Not all analysts like this stock on Stock Chase . One analyst said last year that the company has been stock in consolidations for 3 years. Stock Chase gives this stock 3 stars out of 5. It is on all the dividend lists that I follow. Andrew Button on Motley Fool reviews this stock. Amy Legate-Wolfe on Motley Fool thinks this is a current great buy. The company put out a Press Release about their 2023 results.
Simply Wall Street via Yahoo Finance put out a positive review of this stock. Simply Wall Street gives this stock 3 and one half stars out of 5. They list no warnings.
Toromont Industries Ltd is a Canadian industrial company. The company operates two business segments: Equipment Group and CIMCO. The larger segment by revenue is Equipment Group. The company operates majorly in Canada and derives a smaller portion of sales from the United States of America and other regions. Its web site is here Toromont Industries Ltd .
The last stock I wrote about was about was Alaris Equity Partners Income Trust (TSX-AD, OTC-ALARF) ... learn more. The next stock I will write about will be Supremex Inc (TSX-SXP, OTC-SUMXF) ... learn more on Monday, April 15, 2024 around 5 pm.
This blog is meant for educational purposes only and is not to provide investment advice. I am not a licensed professional investment advisor. 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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