DOREL INDUSTRIES $34.73 - Toronto symbol DII.B

DOREL INDUSTRIES $34.73 (Toronto symbol DII.B; TSINetwork Rating: Extra Risk) (514-934- 3034; www.dorel.com; Shares outstanding: 32.3 million; Market cap: $1.2 billion; Dividend yield: 4.6%) makes a number of items, including readyto- assemble home and office furniture; juvenile products, such as car seats, strollers, high chairs, toddler beds and cribs; and sporting goods, mainly bicycles.

In the three months ended June 30, 2015, Dorel’s sales rose 2.1%, to $669.6 million from $655.8 million a year earlier (all amounts except share price and market cap in U.S. dollars).

Even with the higher sales, earnings fell 16.2%, to $16.6 million, or $0.51 share, from $19.8 million, or $0.61 a share. The high U.S. dollar cut $0.23 a share from the company’s international earnings.

The stock trades at 14.9 times Dorel’s forecast 2015 earnings of $1.78 a share. Its earnings could jump as high as $2.94 a share next year, as demand for premium bikes rises and the company finishes shifting its juvenileproduct manufacturing to Asia from North America and Europe.

The stock trades at just 9.0 times the 2016 estimate. It yields a high 4.6%.

Dorel is our #1 pick for 2015.

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