The Toromont’s consistent revenue growth (up 7% year-over-year) is driven by robust demand in construction, mining, and energy-efficient solutions. Its long-standing relationship as a leading Caterpillar dealer and its focus on diversified end markets provide resilience through economic cycles. The company’s disciplined capital management is evident in its healthy balance sheet.
Toromont has now marked 36 consecutive years of dividend growth including 12.7% compound annual growth rate over the past decade. Prudent capital allocation, segment diversification, and a solid balance sheet position the firm to weather macroeconomic headwinds while the stock trades at 22.5 times the company’s forward earnings forecast.
TOROMONT INDUSTRIES LTD. (Toronto symbol TIH; www.toromont.com) operates through two business segments:
Toromont’s Equipment Group (91% of revenue) is the exclusive dealer of Caterpillar heavy equipment, such as bulldozers, backhoes and excavators, for eastern Canada. The company is also the MaK engine dealer for the Eastern Seaboard of the U.S., from Maine to Virginia.
The CIMCO business (9%) is a market leader in the design, engineering, fabrication, installation and after-sale support of refrigeration systems in industrial and recreational markets.
Toromont recently purchased 60% of AVL Manufacturing Inc. This private firm, based in Hamilton, Ontario, makes specialized enclosures for power generators and heating equipment. It sells these products to a variety of industrial customers in eastern North America, including oil and gas producers, automakers, construction firms and datacentre operators.
The company paid $67.5 million in cash plus common shares worth $13.5 million, for a total of $81.0 million. As well, it has agreed to buy the final 40% by 2031 with the final price based on AVL’s performance.
AVL now plans to open a new production facility in Charlotte, North Carolina. This new plant will cost $56 million and should begin operating in September.
This is AVL’s first expansion into the U.S., and the new facility will help it sell more of its products to datacentre operators in the area.
The purchase helped lift Toromont’s revenue in the quarter ended March 31, 2025, by 7.2%, to $1.09 billion from $1.02 billion a year earlier. Revenue at the Equipment Group (including AVL) improved 9.2% on strong demand for new equipment and rentals. CIMCO’s revenue also rose 18.6% as higher demand from industrial customers offset weaker sales to recreational customers.
Despite the higher revenue, earnings declined 9.9%, to $0.91 a share (or a total of $74.4 million) from $1.01 a share (or $83.9 million). That’s due to a higher proportion of less profitable products.
Toromont ended the quarter with cash of $977.5 million, while its long-term debt of $795.7 million is a low 8% of its market cap.
Growth Stocks: Toromont’s outlook remains bright despite tariffs
Despite the current uncertainty over tariffs, Toromont should benefit from increased spending on new infrastructure projects.
The company will probably earn $5.92 a share for all of 2025, and the stock trades at 22.5 times that forecast. That’s a reasonable multiple as recurring revenue from support services account for about 44% of the company’s total revenue.
The $2.08 dividend yields 1.6%.
Recommendation in The Successful Investor: Toromont Industries Ltd. is a buy.
