TSX:FTT

Stock Analysis Report

Finning International

Executive Summary

Finning International Inc. engages in selling, servicing, and renting heavy equipment, engines, and related products in Canada, South America, the United Kingdom, and Ireland.

Snowflake

Fundamentals

Established dividend payer and fair value.


Similar Companies

Share Price & News

How has Finning International's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

-2.7%

FTT

0.6%

CA Trade Distributors

0.2%

CA Market


1 Year Return

-26.8%

FTT

-13.4%

CA Trade Distributors

2.4%

CA Market

Return vs Industry: FTT underperformed the Canadian Trade Distributors industry which returned -13.4% over the past year.

Return vs Market: FTT underperformed the Canadian Market which returned 2.4% over the past year.


Shareholder returns

FTTIndustryMarket
7 Day-2.7%0.6%0.2%
30 Day-6.4%-1.2%-3.3%
90 Day-6.8%-0.8%-1.8%
1 Year-24.3%-26.8%-10.7%-13.4%6.0%2.4%
3 Year-5.5%-13.4%18.2%8.6%14.2%4.0%
5 Year-12.7%-25.0%26.0%6.2%27.2%8.6%

Price Volatility Vs. Market

How volatile is Finning International's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Finning International undervalued compared to its fair value and its price relative to the market?

43.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: FTT (CA$21.57) is trading below our estimate of fair value (CA$38.19)

Significantly Below Fair Value: FTT is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: FTT is poor value based on its PE Ratio (18.2x) compared to the Trade Distributors industry average (13.4x).

PE vs Market: FTT is poor value based on its PE Ratio (18.2x) compared to the Canadian market (13.7x).


Price to Earnings Growth Ratio

PEG Ratio: FTT is good value based on its PEG Ratio (1x)


Price to Book Ratio

PB vs Industry: FTT is overvalued based on its PB Ratio (1.7x) compared to the CA Trade Distributors industry average (0.8x).


Next Steps

Future Growth

How is Finning International forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

18.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: FTT's forecast earnings growth (18.5% per year) is above the savings rate (1.9%).

Earnings vs Market: FTT's earnings (18.5% per year) are forecast to grow faster than the Canadian market (12.9% per year).

High Growth Earnings: FTT's earnings are forecast to grow, but not significantly.

Revenue vs Market: FTT's revenue (3% per year) is forecast to grow slower than the Canadian market (5.5% per year).

High Growth Revenue: FTT's revenue (3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: FTT's Return on Equity is forecast to be low in 3 years time (15.8%).


Next Steps

Past Performance

How has Finning International performed over the past 5 years?

0.2%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: FTT's earnings have grown by 0.2% per year over the past 5 years.

Accelerating Growth: FTT's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: FTT had negative earnings growth (-26.3%) over the past year, making it difficult to compare to the Trade Distributors industry average (-7%).


Return on Equity

High ROE: FTT's Return on Equity (9.6%) is considered low.


Return on Assets

ROA vs Industry: FTT has a higher Return on Assets than the Trade Distributors industry average last year.


Return on Capital Employed

ROCE Improving: FTT has significantly improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Finning International's financial position?


Financial Position Analysis

Short Term Liabilities: FTT's short term assets (CA$4.2B) exceeds its short term liabilities (CA$2.6B)

Long Term Liabilities: FTT's short term assets (4.2B) exceeds its long term liabilities (1.8B)


Debt to Equity History and Analysis

Debt Level: FTT's debt to equity ratio (100.7%) is considered high

Reducing Debt: FTT's debt to equity ratio has increased from 78% to 100.7% over the past 5 years.

Debt Coverage: FTT's debt is not well covered by operating cash flow (1.6%).

Interest Coverage: FTT's interest payments on its debt are well covered by EBIT (5.1x coverage).


Balance Sheet

Inventory Level: FTT has a high level of physical assets or inventory.

Debt Coverage by Assets: FTT's debt is covered by short term assets (assets are 2.040150x debt).


Next Steps

Dividend

What is Finning International's current dividend yield, its reliability and sustainability?

3.80%

Current Dividend Yield


Dividend Yield vs Market

company3.8%marketbottom25%2.0%markettop25%6.0%industryaverage3.2%forecastin3Years3.8%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: FTT's dividend (3.8%) is higher than the bottom 25% of dividend payers in the Canadian market (2.01%).

High Dividend: FTT's dividend (3.8%) is low compared to the top 25% of dividend payers in the Canadian market (5.96%).

Stable Dividend: FTT's dividends per share have been stable in the past 10 years.

Growing Dividend: FTT's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (68%), FTT's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: FTT's dividends in 3 years are forecast to be well covered by earnings (38.7% payout ratio).


Next Steps

Management

What is the CEO of Finning International's salary, the management and board of directors tenure and is there insider trading?

4.6yrs

Average management tenure


CEO

L. Thomson (49yo)

6.3yrs

Tenure

CA$5,918,689

Compensation

Mr. L. Scott Thomson has been the Chief Executive Officer and President of Finning International Inc., since June 17, 2013. Prior to joining Finning in 2013, Mr. Thomson served as the Chief Financial Offic ...


CEO Compensation Analysis

Compensation vs. Market: L.'s total compensation ($USD4.52M) is about average for companies of similar size in the Canadian market ($USD2.95M).

Compensation vs Earnings: L.'s compensation has been consistent with company performance over the past year.


Management Age and Tenure

4.6yrs

Average Tenure

54.5yo

Average Age

Experienced Management: FTT's management team is considered experienced (4.6 years average tenure).


Board Age and Tenure

5.4yrs

Average Tenure

65.5yo

Average Age

Experienced Board: FTT's board of directors are considered experienced (5.4 years average tenure).


Insider Trading

Insider Buying: FTT insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyCA$55,85515 Aug 19
Greg Palaschuk
EntityIndividual
Shares2,565
Max PriceCA$21.78
BuyCA$23,30508 Aug 19
Christopher Patterson
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,000
Max PriceCA$23.31
BuyCA$21,50003 Jun 19
David F. Primrose
EntityIndividual
Role
Senior Key Executive
Managing Director of Finning UK & Ireland
Shares1,000
Max PriceCA$21.50
SellCA$78,98215 May 19
Cornelis Breukels
EntityIndividual
Shares3,484
Max PriceCA$22.67
BuyCA$115,35110 May 19
Vicki Avril
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares5,000
Max PriceCA$23.07
BuyCA$51,09510 May 19
Greg Palaschuk
EntityIndividual
Shares2,240
Max PriceCA$22.81
SellCA$48,76006 Mar 19
Jeff Erdman
EntityIndividual
Shares2,000
Max PriceCA$24.38
BuyCA$400,22611 Feb 19
David Cummings
EntityIndividual
Role
Senior Key Executive
Executive VP & Chief Digital Officer
Shares16,600
Max PriceCA$24.11
BuyCA$54,36028 Dec 18
Harold Kvisle
EntityIndividual
Role
Chairman of the Board
Independent Chairman
Shares2,400
Max PriceCA$22.65
BuyCA$120,25013 Dec 18
Harold Kvisle
EntityIndividual
Role
Chairman of the Board
Independent Chairman
Shares5,000
Max PriceCA$24.05

Ownership Breakdown


Management Team

  • Steve Nielsen (64yo)

    Executive VP & CFO

    • Tenure: 4.6yrs
    • Compensation: CA$2.12m
  • L. Thomson (49yo)

    CEO, President & Non-Independent Director

    • Tenure: 6.3yrs
    • Compensation: CA$5.92m
  • Dave Primrose

    Managing Director of Finning UK & Ireland

    • Tenure: 10.5yrs
  • John Pollesel (56yo)

    Senior Vice President of Mining - Finning Canada

    • Tenure: 5yrs
  • Chad Hiley

    Chief Human Resources Officer

    • Tenure: 3.8yrs
  • Marcello Marchese (53yo)

    President of Finning South America

    • Tenure: 7.3yrs
    • Compensation: CA$1.69m
  • Amanda Hobson

    Senior Vice President of Investor Relations & Treasury

    • Tenure: 0.2yrs
  • Dave Cummings

    Executive VP & Chief Digital Officer

    • Tenure: 0.8yrs
    • Compensation: CA$1.49m
  • H. Murdoch

    General Counsel & Corporate Secretary

    • Tenure: 3.5yrs
  • Elisha McCallum

    Director of Global Communications

    • Tenure: 0yrs

Board Members

  • Kathleen O'Neill (65yo)

    Independent Director

    • Tenure: 12.7yrs
    • Compensation: CA$207.50k
  • Stu Levenick (66yo)

    Independent Director

    • Tenure: 3.6yrs
    • Compensation: CA$231.00k
  • Hal Kvisle (66yo)

    Independent Chairman

    • Tenure: 0.8yrs
    • Compensation: CA$207.50k
  • Vicki Avril (65yo)

    Independent Director

    • Tenure: 2.9yrs
    • Compensation: CA$203.46k
  • Nicky Hartery (67yo)

    Independent Director

    • Tenure: 5.4yrs
    • Compensation: CA$225.50k
  • Chris Patterson (65yo)

    Independent Director

    • Tenure: 9yrs
    • Compensation: CA$204.74k
  • Marcelo Awad (66yo)

    Independent Director

    • Tenure: 5.4yrs
    • Compensation: CA$206.00k
  • Jacynthe Côté (60yo)

    Independent Director

    • Tenure: 5yrs
    • Compensation: CA$216.50k
  • L. Thomson (49yo)

    CEO, President & Non-Independent Director

    • Tenure: 6.3yrs
    • Compensation: CA$5.92m
  • Jim Carter (69yo)

    Independent Director

    • Tenure: 12.1yrs
    • Compensation: CA$227.50k

Company Information

Finning International Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Finning International Inc.
  • Ticker: FTT
  • Exchange: TSX
  • Founded: 1933
  • Industry: Trading Companies and Distributors
  • Sector: Capital Goods
  • Market Cap: CA$3.523b
  • Shares outstanding: 163.31m
  • Website: https://www.finning.com

Number of Employees


Location

  • Finning International Inc.
  • 565 Great Northern Way
  • Suite 300
  • Vancouver
  • British Columbia
  • V5T 0H8
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
FTTTSX (The Toronto Stock Exchange)YesCommon SharesCACADMay 1981
CIHDB (Deutsche Boerse AG)YesCommon SharesDEEURMay 1981
FING.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDMay 1981
0UVOLSE (London Stock Exchange)YesCommon SharesGBCADMay 1981

Biography

Finning International Inc. engages in selling, servicing, and renting heavy equipment, engines, and related products in Canada, South America, the United Kingdom, and Ireland. It serves various industries, ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/21 23:35
End of Day Share Price2019/10/21 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.