TSX:TIH

Stock Analysis Report

Toromont Industries

Executive Summary

Toromont Industries Ltd. provides specialized capital equipment in Canada, the United States, and internationally.


Snowflake Analysis

Proven track record with adequate balance sheet and pays a dividend.


Similar Companies

Share Price & News

How has Toromont Industries's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: TIH has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.0%

TIH

-0.5%

CA Trade Distributors

0.1%

CA Market


1 Year Return

1.1%

TIH

-1.9%

CA Trade Distributors

4.7%

CA Market

Return vs Industry: TIH exceeded the Canadian Trade Distributors industry which returned -1.9% over the past year.

Return vs Market: TIH underperformed the Canadian Market which returned 4.7% over the past year.


Shareholder returns

TIHIndustryMarket
7 Day-2.0%-0.5%0.1%
30 Day-2.5%-3.5%0.8%
90 Day2.3%-0.9%3.7%
1 Year2.8%1.1%1.2%-1.9%7.9%4.7%
3 Year58.9%51.5%15.3%5.7%17.9%7.3%
5 Year144.9%124.2%40.8%20.2%33.8%14.4%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Toromont Industries undervalued compared to its fair value and its price relative to the market?

49.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: TIH (CA$69.94) is trading below our estimate of fair value (CA$137.16)

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


Price To Earnings Ratio

PE vs Industry: TIH is poor value based on its PE Ratio (19.9x) compared to the Trade Distributors industry average (14.8x).

PE vs Market: TIH is poor value based on its PE Ratio (19.9x) compared to the Canadian market (16.2x).


Price to Earnings Growth Ratio

PEG Ratio: TIH is poor value based on its PEG Ratio (1.9x)


Price to Book Ratio

PB vs Industry: TIH is overvalued based on its PB Ratio (3.7x) compared to the CA Trade Distributors industry average (1.1x).


Next Steps

Future Growth

How is Toromont Industries forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

10.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TIH's forecast earnings growth (10.3% per year) is above the savings rate (1.4%).

Earnings vs Market: TIH's earnings (10.3% per year) are forecast to grow slower than the Canadian market (10.9% per year).

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

Revenue vs Market: TIH's revenue (5.1% per year) is forecast to grow faster than the Canadian market (4.7% per year).

High Growth Revenue: TIH's revenue (5.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TIH's Return on Equity is forecast to be low in 3 years time (18.9%).


Next Steps

Past Performance

How has Toromont Industries performed over the past 5 years?

16.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TIH has high quality earnings.

Growing Profit Margin: TIH's current net profit margins (7.8%) are higher than last year (7.2%).


Past Earnings Growth Analysis

Earnings Trend: TIH's earnings have grown by 16.7% per year over the past 5 years.

Accelerating Growth: TIH's earnings growth over the past year (13.8%) is below its 5-year average (16.7% per year).

Earnings vs Industry: TIH earnings growth over the past year (13.8%) exceeded the Trade Distributors industry -2.7%.


Return on Equity

High ROE: TIH's Return on Equity (18.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Toromont Industries's financial position?


Financial Position Analysis

Short Term Liabilities: TIH's short term assets (CA$1.8B) exceed its short term liabilities (CA$995.0M).

Long Term Liabilities: TIH's short term assets (CA$1.8B) exceed its long term liabilities (CA$842.5M).


Debt to Equity History and Analysis

Debt Level: TIH's debt to equity ratio (42.1%) is considered high.

Reducing Debt: TIH's debt to equity ratio has increased from 19.7% to 42.1% over the past 5 years.

Debt Coverage: TIH's debt is well covered by operating cash flow (22.6%).

Interest Coverage: TIH's interest payments on its debt are well covered by EBIT (22.7x coverage).


Balance Sheet

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

Debt Coverage by Assets: TIH's debt is covered by short term assets (assets are 2.8x debt).


Next Steps

Dividend

What is Toromont Industries's current dividend yield, its reliability and sustainability?

1.77%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Toromont Industries before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company1.8%marketbottom25%2.0%markettop25%5.4%industryaverage3.2%forecastin3Years1.8%

Current dividend yield vs market & industry

Notable Dividend: TIH's dividend (1.77%) isn’t notable compared to the bottom 25% of dividend payers in the Canadian market (2.01%).

High Dividend: TIH's dividend (1.77%) is low compared to the top 25% of dividend payers in the Canadian market (5.38%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (30.7%), TIH's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: TIH's dividends in 3 years are forecast to be well covered by earnings (26.2% payout ratio).


Next Steps

Management

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

6.5yrs

Average management tenure


CEO

Scott Medhurst (57yo)

7.9yrs

Tenure

CA$3,886,773

Compensation

Mr. Scott J. Medhurst has been the Chief Executive Officer and President of Toromont Industries Ltd. since March 1, 2012. Mr. Medhurst served as the President of Toromont CAT at Toromont Industries Ltd. si ...


CEO Compensation Analysis

Compensation vs Market: Scott's total compensation ($USD2.94M) is about average for companies of similar size in the Canadian market ($USD2.82M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Scott Medhurst
CEO, President & Director7.9yrsCA$3.89m0.21% CA$11.8m
Paul Jewer
CFO & Executive VP14.3yrsCA$1.95m0.046% CA$2.6m
Michael Cuddy
Chief Information Officer & VP25.1yrsCA$1.34m0.13% CA$7.5m
David Malinauskas
President of CIMCO Refrigeration5.1yrsCA$862.45k0.020% CA$1.2m
Lynn Korbak
General Counsel & Corporate Secretary2.1yrsno data0.0089% CA$511.6k
Colin Goheen
President of Battlefield Equipment Rentals1.1yrsno datano data

6.5yrs

Average Tenure

Experienced Management: TIH's management team is seasoned and experienced (6.5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Scott Medhurst
CEO, President & Director7.9yrsCA$3.89m0.21% CA$11.8m
Jeffrey Chisholm
Independent Director9.1yrsCA$160.50k0.032% CA$1.9m
Robert Franklin
Independent Director26.1yrsCA$164.50k0.15% CA$8.8m
Peter Blake
Corporate Director0.8yrsno data0.00061% CA$35.0k
James Gill
Independent Director4.3yrsCA$157.50k0.024% CA$1.4m
Robert Ogilvie
Independent Chairman6.8yrsCA$325.00k2.49% CA$143.0m
Wayne Hill
Independent Director32.1yrsCA$169.50k0.028% CA$1.6m
Richard Roy
Independent Director1.3yrsCA$22.89k0.0037% CA$209.9k
Katherine Rethy
Independent Director6.6yrsCA$166.50k0.0021% CA$118.7k
Cathryn Cranston
Independent Director6.6yrsCA$155.50k0.0069% CA$398.6k

6.7yrs

Average Tenure

66.5yo

Average Age

Experienced Board: TIH's board of directors are considered experienced (6.7 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: TIH insiders have only sold shares 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

Toromont Industries Ltd.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Toromont Industries Ltd.
  • Ticker: TIH
  • Exchange: TSX
  • Founded: 1961
  • Industry: Trading Companies and Distributors
  • Sector: Capital Goods
  • Market Cap: CA$5.736b
  • Shares outstanding: 82.01m
  • Website: https://www.toromont.com

Number of Employees


Location

  • Toromont Industries Ltd.
  • 3131 Highway 7 West
  • PO Box 5511
  • Concord
  • Ontario
  • L4K 1B7
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TIHTSX (The Toronto Stock Exchange)YesCommon SharesCACADJan 1976
14TDB (Deutsche Boerse AG)YesCommon SharesDEEURJan 1976
TMTN.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDJan 1976

Biography

Toromont Industries Ltd. provides specialized capital equipment in Canada, the United States, and internationally. It operates in two segments, Equipment Group and CIMCO. The Equipment Group segment is involved in the sale, rental, and service of mobile equipment for Caterpillar and other manufacturers; sale, rental, and service of engines used in various applications, including industrial, commercial, marine, on-highway trucks, and power generation; and sale of complementary and related products, parts, and services. This segment serves road building, mining, aggregates, public infrastructure, residential construction, power generation, marine, agriculture, forestry, on-highway truck engines, industrial, demolition, and waste management sectors. The CIMCO segment is involved in the design, engineering, fabrication, installation, and after-sale support of refrigeration systems in industrial and recreational markets. Toromont Industries Ltd. was founded in 1961 and is based in Concord, Canada. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/23 01:02
End of Day Share Price2020/02/21 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.