TSX:FTT

Stock Analysis Report

Finning International

Executive Summary

Finning International Inc. engages in selling, servicing, and renting heavy equipment, and power and energy systems in Canada, the United States, South America, the United Kingdom, and Ireland.


Snowflake Analysis

Established dividend payer with mediocre balance sheet.


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

Stable Share Price: FTT's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

3.0%

FTT

0.4%

CA Trade Distributors

1.1%

CA Market


1 Year Return

-34.7%

FTT

-25.6%

CA Trade Distributors

-22.9%

CA Market

Return vs Industry: FTT underperformed the Canadian Trade Distributors industry which returned -27.3% over the past year.

Return vs Market: FTT underperformed the Canadian Market which returned -24.8% over the past year.


Shareholder returns

FTTIndustryMarket
7 Day3.0%0.4%1.1%
30 Day-16.4%-17.5%-17.3%
90 Day-38.2%-28.0%-23.4%
1 Year-32.3%-34.7%-23.1%-25.6%-20.4%-22.9%
3 Year-31.4%-37.4%-14.2%-21.6%-12.7%-20.8%
5 Year-26.7%-37.3%4.8%-10.8%0.1%-14.9%

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?

47.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: FTT (CA$15.55) is trading below our estimate of fair value (CA$29.65)

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 (10.5x) compared to the Trade Distributors industry average (10.1x).

PE vs Market: FTT is poor value based on its PE Ratio (10.5x) compared to the Canadian market (10.3x).


Price to Earnings Growth Ratio

PEG Ratio: FTT is poor value based on its PEG Ratio (50.4x)


Price to Book Ratio

PB vs Industry: FTT is overvalued based on its PB Ratio (1.2x) compared to the CA Trade Distributors industry average (0.7x).


Next Steps

Future Growth

How is Finning International forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

0.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: FTT's forecast earnings growth (0.2% per year) is below the savings rate (1.4%).

Earnings vs Market: FTT's earnings (0.2% per year) are forecast to grow slower than the Canadian market (5.1% per year).

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

Revenue vs Market: FTT's revenue is expected to decline over the next 3 years (-3.5% per year).

High Growth Revenue: FTT's revenue is forecast to decline over the next 3 years (-3.5% 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 (14.6%).


Next Steps

Past Performance

How has Finning International performed over the past 5 years?

14.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: FTT has high quality earnings.

Growing Profit Margin: FTT's current net profit margins (3.1%) are lower than last year (3.3%).


Past Earnings Growth Analysis

Earnings Trend: FTT's earnings have grown by 14.6% per year over the past 5 years.

Accelerating Growth: FTT's earnings growth over the past year (4.3%) is below its 5-year average (14.6% per year).

Earnings vs Industry: FTT earnings growth over the past year (4.3%) underperformed the Trade Distributors industry 4.3%.


Return on Equity

High ROE: FTT's Return on Equity (11.4%) is considered low.


Next Steps

Financial Health

How is Finning International's financial position?


Financial Position Analysis

Short Term Liabilities: FTT's short term assets (CA$3.7B) exceed its short term liabilities (CA$2.0B).

Long Term Liabilities: FTT's short term assets (CA$3.7B) exceed its long term liabilities (CA$1.8B).


Debt to Equity History and Analysis

Debt Level: FTT's debt to equity ratio (82.5%) is considered high.

Reducing Debt: FTT's debt to equity ratio has increased from 66.8% to 82.5% over the past 5 years.

Debt Coverage: FTT's debt is not well covered by operating cash flow (11%).

Interest Coverage: FTT's interest payments on its debt are well covered by EBIT (4.5x coverage).


Balance Sheet


Next Steps

Dividend

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

5.27%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: FTT's dividend (5.27%) is higher than the bottom 25% of dividend payers in the Canadian market (2.75%).

High Dividend: FTT's dividend (5.27%) is low compared to the top 25% of dividend payers in the Canadian market (8.52%).


Stability and Growth of Payments

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 (55%), 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 (39.9% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

4.0yrs

Average management tenure


CEO

L. Thomson (49yo)

6.83s

Tenure

CA$13,890,044

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 ($USD9.82M) is above average for companies of similar size in the Canadian market ($USD2.57M).

Compensation vs Earnings: L.'s compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
L. Thomson
President6.83yrsCA$13.89m0.0062% CA$155.4k
David Cummings
Executive VP & Chief Digital Officer1.25yrsCA$1.52m0.052% CA$1.3m
Kevin Parkes
President of Finning Canada1.25yrsCA$1.71m0.0010% CA$26.0k
Greg Palaschuk
Chief Financial Officer0.083yrno data0.013% CA$321.2k
Amanda Hobson
Senior Vice President of Investor Relations & Treasury0.67yrno data0.0014% CA$35.4k
H. Murdoch
General Counsel & Corporate Secretary4yrsno data0.0024% CA$60.1k
Elisha McCallum
Director of Global Communicationsno datano datano data
Chad Hiley
Chief Human Resources Officer4.25yrsno data0.0052% CA$131.7k
David F. Primrose
Managing Director of Finning UK & Ireland11yrsno data0.018% CA$464.0k
John Pollesel
Senior Vice President of Mining - Finning Canada5.5yrsno datano data

4.0yrs

Average Tenure

Experienced Management: FTT's management team is considered experienced (4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
L. Thomson
President6.83yrsCA$13.89m0.0062% CA$155.4k
Kathleen O'Neill
Independent Director13.17yrsCA$237.50k0.0086% CA$217.6k
Stuart Levenick
Independent Director4.08yrsCA$262.50kno data
Harold Kvisle
Independent Chairman of the Board1.25yrsCA$388.13k0.022% CA$544.4k
Vicki Avril-Groves
Independent Director3.42yrsCA$240.20k0.0092% CA$233.3k
Nicholas Hartery
Independent Director5.92yrsCA$257.00kno data
Christopher Patterson
Independent Director9.5yrsCA$237.50k0.0056% CA$140.3k
Marcelo Awad
Independent Director5.92yrsCA$237.50kno data
Jacynthe Côté
Independent Director5.5yrsCA$252.50k0.0062% CA$155.4k
James Edward Carter
Independent Director12.58yrsCA$257.50k0.0062% CA$155.4k

5.9yrs

Average Tenure

65.5yo

Average Age

Experienced Board: FTT's board of directors are considered experienced (5.9 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

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


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

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$2.527b
  • Shares outstanding: 162.52m
  • 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, and power and energy systems in Canada, the United States, South America, the United Kingdom, and Ireland. It offers tractors, off-highway trucks, drills, electric rope shovels, hydraulic excavators and draglines, backhoe loaders, excavators, forklifts, articulated trucks, loaders, log loaders, tree harvesters, skidders, motor graders, paving products, compactors, wheel tractor-scrapers, pipe layers, extensive underground equipment, and other products. The company also sells and rents Caterpillar-branded and non-branded engines and power systems for use in electric power generation, oil and gas, marine, and industrial applications; and supplies complete or partial power systems engineering projects to customers. It serves various industries, including mining, agriculture, quarrying, forestry, construction, pipeline, oil and gas, marine transportation, fisheries, and commercial transport, as well as various power system applications and government sector. The company was formerly known as Finning Ltd. and changed its name to Finning International Inc. in April 1997. Finning International Inc. was founded in 1933 and is headquartered in Vancouver, Canada. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/07 01:53
End of Day Share Price2020/04/06 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


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.