One of Canada’s most diversified industrial products and services providers (Wajax Corp.) serves the county across the construction, mining, forestry, oil sands, and transportation sectors. Its strategic initiatives position it for sustainable growth as it maintains its financial health through consistent revenue growth and dividend increases.
With a forward-looking approach that includes new computer system rollouts and cost structure improvements, this well-regarded firm is well-equipped to capitalize on future opportunities in the Canadian industrial market.
The stock trades at just 7.8 times the company’s forward earnings forecast.
WAJAX CORP. (Toronto symbol WJX; www.wajax.ca) sells and services cranes, forklifts and other heavy equipment. Wajax also provides related parts and systems such as ball bearings, hoses, diesel engines and transmissions. The company’s customers are spread across the resources, construction, manufacturing and transportation industries.
Wajax Corporation has maintained a long-standing partnership with Japan’s Hitachi Construction Machinery. In 2022, this relationship was significantly expanded when Wajax became the sole Canadian distributor for Hitachi’s construction excavators, mining equipment, and related aftermarket parts. This shift followed the dissolution of a joint venture between Hitachi and John Deere, enabling Wajax to work directly with Hitachi without intermediaries. The new arrangement has provided Wajax with enhanced access to Hitachi’s product development, improved market responsiveness, and a broader product portfolio, including premium equipment and parts.
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In September 2023, Wajax acquired Sault Ste. Marie, Ontario-based Beta Fluid Power Ltd. and Beta Industrial Ltd. The purchase price was not disclosed.
Beta Fluid is a leading regional supplier of hydraulic and pneumatic equipment for use in the industrial, mining and construction sectors. It also offers hydraulic and pneumatic maintenance, repair and replacement services, including mobile services. Beta Industrial provides a wide range of on-site facility repair and maintenance services. Together, Beta Fluid and Beta Industrial employed a team of approximately forty-two full-time employees.
Dividend Stocks: High yield appears safe as the backlog grows
In the quarter ended December 31, 2024, Wajax’s revenue rose 4.3%, to $565.9 million from $542.6 million a year earlier. Revenue in western Canada of $274.9 million increased 16.7%, due primarily to higher industrial parts sales and higher mining equipment sales, including
the delivery of two large mining shovels in the fourth quarter of 2024 with no such deliveries in the fourth quarter of the prior year. Revenue in central Canada of $99.7 million decreased 5.4%, due mainly to lower equipment sales in the construction and forestry category, as well as
lower Engineered Repair Services sales. The decrease was offset partially by higher equipment sales in the material handling category. Revenue in eastern Canada of $191.4 million decreased 5.1%, due primarily to lower equipment sales in the construction and forestry category, as well as lower industrial parts sales. The decrease was partially offset by higher equipment sales in the
material handling category.
Excluding one-time items, Wajax’s earnings fell 57.9%, to $7.5 million, or $0.35 a share, from $17.8 million or $0.83. The company’s costs rose, and it sold fewer high-profit-margin products.
The company ended 2024 with a backlog of $564.4 million, an increase of $10.5 million over 2023. The backlog included seven large mining shovels.
The company raised its quarterly dividend by 6.1% with the April 2024 payment, to $0.35 a share from $0.33. The stock now yields a high 8.0% and the firm remains one of Canada’s most diversified industrial products and services providers.
Recommendation in Power Growth Investor: Wajax Corp. is a buy.
