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Toromont Industries (TSE:TIH)
TSX:TIH
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Toromont Industries
(TSX:TIH)76Outperform
Positive Factors
Dividend Increase
The quarterly dividend was increased 8% to $0.52/sh.
Financial Performance
Financial performance was better-than-expected in Q4/24, supporting organic and M&A growth to deliver EPS growth.
Negative Factors
Tariff Concerns
The potential for tariffs between the US and Canada is an overhang and could impact customer capex decisions.
Toromont Industries (TIH) vs. S&P 500 (SPY)
Market Cap
C$9.59B
Dividend Yield1.59%
Average Volume (3M)149.33K
Price to Earnings (P/E)19.1
Beta (1Y)0.78
Revenue Growth8.28%
EPS Growth-3.92%
CountryCA
Employees7,000
SectorIndustrials
Sector Strength66
IndustryIndustrial Equipment Distributors
Share Statistics
EPS (TTM)6.18
Shares Outstanding81,302,155
10 Day Avg. Volume147,850
30 Day Avg. Volume149,330
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.97
Price to Cash Flow (P/CF)6.40
P/FCF Ratio7.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$134.07Price Target Upside13.69% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Toromont Industries Business Overview & Revenue Model
Company DescriptionToromont Industries Ltd is a Canadian industrial company. The company operates two business segments: Equipment Group and CIMCO. The larger segment by revenue, Equipment Group includes a Caterpillar dealership and rental operation of construction equipment. CIMCO offers solutions for the design, engineering, fabrication, and installation of industrial and recreational refrigeration systems. The company operates primarily in Canada and derives a smaller portion of sales from the United States of America.
How the Company Makes MoneyToromont Industries generates revenue through multiple channels. The Equipment Group segment earns income by selling new and used Caterpillar machinery, providing equipment rental services, and offering after-sales support through parts and maintenance services. This segment benefits from its strong relationship with Caterpillar Inc., which grants it exclusive distribution rights in specific geographic regions. CIMCO Refrigeration contributes to the company’s revenue by designing and installing custom refrigeration systems for industrial applications and recreational facilities, as well as providing ongoing service and maintenance. The diversity in offerings across these segments helps Toromont maintain a stable revenue stream, supported by recurring service contracts and a broad customer base across different industries.
Toromont Industries Financial Statement Overview
Summary
Toromont Industries shows strong revenue growth, stable margins, and effective asset management. The financial statements demonstrate consistent profitability, a robust balance sheet, and stable cash flow generation, ensuring liquidity and operational flexibility.Income Statement
Toromont Industries has demonstrated strong revenue growth over the past years, with a consistent increase in total revenue from $3.48 billion in 2020 to $5.02 billion in 2024. The gross profit margin has remained relatively stable, indicating effective cost management. The net profit margin has also shown improvement, reaching 10.1% in 2024. The EBIT and EBITDA margins are strong, reflecting solid operational efficiency. Overall, the income statement indicates a well-performing company with robust revenue and profitability metrics.85
Very Positive
Balance Sheet
The company maintains a healthy balance sheet with a strong equity position, as evidenced by the equity ratio of 60.7% in 2024. The debt-to-equity ratio remains low, indicating prudent financial leverage. Return on equity (ROE) has improved over the years, reaching 17.1% in 2024, highlighting effective use of shareholders' equity. The balance sheet reflects financial stability with controlled leverage and strong asset management.80
Positive
Cash Flow
Operating cash flow has been positive and stable, supporting the company's ability to generate cash from operations. Free cash flow growth has been moderate, with a slight decline in 2024 compared to 2023. The operating cash flow to net income ratio is strong, indicating good cash conversion efficiency. Despite a drop in free cash flow, the company maintains a solid cash position, ensuring liquidity and operational flexibility.78
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 5.02B | 4.62B | 4.23B | 3.89B | 3.48B | Gross Profit |
| 1.26B | 1.24B | 1.13B | 969.77M | 835.75M | EBIT |
| 670.17M | 704.23M | 624.17M | 475.94M | 372.43M | EBITDA |
| 928.78M | 932.65M | 802.97M | 643.32M | 547.82M | Net Income Common Stockholders |
| 506.52M | 534.71M | 454.20M | 332.71M | 254.91M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 890.82M | 1.04B | 927.78M | 916.83M | 591.13M | Total Assets |
| 4.87B | 4.57B | 4.18B | 3.58B | 3.35B | Total Debt |
| 680.91M | 682.06M | 663.22M | 658.12M | 662.86M | Net Debt |
| -209.90M | -358.69M | -264.56M | -258.71M | 71.74M | Total Liabilities |
| 1.91B | 1.89B | 1.86B | 1.63B | 1.65B | Stockholders Equity |
| 2.96B | 2.68B | 2.33B | 1.95B | 1.70B |
| Cash Flow | Free Cash Flow | |||
| 222.71M | 241.32M | 147.62M | 471.52M | 305.74M | Operating Cash Flow |
| 359.23M | 355.79M | 216.95M | 542.72M | 349.03M | Investing Cash Flow |
| -206.80M | -78.12M | -44.33M | -68.87M | -32.55M | Financing Cash Flow |
| -303.54M | -164.49M | -162.16M | -148.14M | -90.88M |
Toromont Industries Technical Analysis
Negative
117.93
Price Trends
117.64
Positive
118.68
Negative
120.59
Negative
Market Momentum
0.75
Positive
44.07
Neutral
21.79
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:TIH, the sentiment is Negative. The current price of 117.93 is below the 20-day moving average (MA) of 120.08, above the 50-day MA of 117.64, and below the 200-day MA of 120.59, indicating a neutral trend. The MACD of 0.75 indicates Positive momentum. The RSI at 44.07 is Neutral, neither overbought nor oversold. The STOCH value of 21.79 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:TIH.
Toromont Industries Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | C$32.22B | 45.69 | 8.24% | 0.58% | 11.98% | 22.53% | |
76 Outperform | C$9.59B | 19.09 | 17.96% | 1.59% | 8.28% | -3.92% | |
73 Outperform | C$1.29B | 27.88 | 7.98% | 3.01% | 3.49% | 9.85% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% |
* Industrials Sector Average
Performance Comparison
TSE:TIH
Toromont Industries
117.93
-3.02
-2.50%
STN
Stantec
83.30
1.36
1.66%
EXCOF
Exco Technologies
4.22
-0.91
-17.74%
TSE:SIS
Savaria
17.15
0.81
4.96%
TSE:WSP
WSP Global
246.90
26.06
11.80%
RUSMF
Russel Metals
28.06
-2.89
-9.34%
Toromont Industries Earnings Call Summary
Earnings Call Date: Feb 11, 2025 | % Change Since: 0.49% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mixed performance with strengths in liquidity, dividend growth, and CIMCO's strong performance. However, challenges remain with decreased returns, economic uncertainties, and increased expenses. The acquisition of AVL is a strategic highlight but does not offset macroeconomic concerns.Highlights
Strong Financial Position
Ended the year with ample liquidity including cash of $891 million and an additional $459 million available under existing credit facilities. Net debt to total capitalization ratio was negative 9%.
Dividend Increase
The board of directors increased the quarterly dividend by $0.04 per share or 8.3% to $0.52 per share, marking the 36th consecutive year of dividend increases.
CIMCO Performance
CIMCO revenue increased 16% year-to-date with operating income up 35%. Backlog increased by 34% with strong growth in recreational and industrial markets.
AVL Acquisition
Acquired a 60% ownership of AVL Manufacturing, a leader in power generation enclosures, expected to be accretive and aligned with long-term growth strategies.
Lowlights
Decreased Return on Equity and Capital
Return on equity was lower at 19.2% compared to 23.1% for 2023, and return on capital employed was 25.7%, down from 30.4% last year.
Economic and Political Challenges
Uncertain economic and political environment highlighted by recent U.S.-Canada tariff announcements and foreign exchange rate volatility.
Increased Expenses
Expense levels increased 16% in the quarter and 10% year-to-date, attributed to higher activity levels, staffing, and inflation.
Mining Segment Concerns
Mining bookings decreased 65% in the quarter against a strong comparator from the previous year.
Company Guidance
During the Toromont Industries Limited 2024 Fourth Quarter and Full Year Results Conference Call, the company provided comprehensive guidance on its financial performance and strategic direction. Key metrics included a 7% increase in consolidated revenue for the fourth quarter and 9% year-to-date, with the Equipment Group and CIMCO both contributing to this growth. Investment in non-cash working capital rose by 32%, driven by higher inventory levels. The company's net debt to total capitalization ratio was at a favorable negative 9%, with ample liquidity reflected in $891 million cash and $459 million available under credit facilities. Return on equity was reported at 19.2%, a decrease from the previous year's 23.1%, while return on capital employed stood at 25.7%. Toromont also increased its quarterly dividend by $0.04 per share, marking its 36th consecutive year of dividend increases. The backlog was reported at a healthy $1.1 billion, though slightly down from $1.2 billion last year. The company highlighted its strategic acquisition of a 60% stake in AVL Manufacturing, Inc., aiming for long-term growth through organic initiatives and disciplined capital allocation.Toromont Industries Corporate Events
DividendsFinancial Disclosures
Toromont Industries Boosts Dividend Amid Strong Q4 Results
Positive
Feb 11, 2025
Toromont Industries Ltd. has reported its financial results for the fourth quarter and full year of 2024, indicating a 7% increase in quarterly revenue and a 9% rise in annual revenue compared to the previous year. Despite facing challenges in the residential sector and rental markets, the company managed to improve equipment deliveries and maintain a strong financial position, leading to an 8.3% increase in its quarterly dividend, marking the 36th consecutive year of dividend growth.
M&A TransactionsBusiness Operations and Strategy
Toromont Industries Expands Power Systems Capabilities with AVL Acquisition
Positive
Feb 3, 2025
Toromont Industries Ltd. has acquired a 60% stake in AVL Manufacturing Inc., a company specializing in power generation and storage enclosures serving the data center market in eastern North America. This acquisition is expected to enhance Toromont’s capabilities and market reach, particularly in the growing North American power enclosure market, while maintaining AVL’s operational continuity under its current leadership.
Financial Disclosures
Toromont Industries to Release 2024 Financial Results
Neutral
Jan 28, 2025
Toromont Industries Ltd. announced it will release its 2024 full-year and fourth-quarter financial results on February 11, 2025. A teleconference and audio webcast will be held on February 12, 2025, to discuss these results, featuring addresses from the company’s top executives followed by a Q&A session. This announcement provides stakeholders with an opportunity to gain insights into the company’s performance and strategic outlook.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.