TOROMONT INDUSTRIES LTD. $20.01 (Toronto symbol TIH; TSINetwork Rating: Extra Risk) (416-667-5511; www.toromont.com; Shares outstanding: 77.2 million; Market cap: $1.5 billion; Dividend yield: 2.2%) distributes a broad range of industrial equipment, including machinery made by Caterpillar Inc. Toromont also makes refrigeration systems through its CIMCO division.
In July 2011, Toromont completed the spinoff of Enerflex Ltd.. Shareholders received shares of the new Toromont and shares of Enerflex. That company leases and sells equipment and services for natural gas production, including field production plants and compression and processing plants.
In the three months ended September 30, 2011, higher equipment sales and rentals pushed up Toromont’s revenue by 9.3%, to $367.3 million from $336.0 million a year earlier. Without one-time items, earnings per share rose 33.3% to $0.40 from $0.30, on the higher revenue and improved profit margins.
Order backlogs keep rising
Order bookings were up 17% from a year earlier, reflecting strength in mining, construction and road building. That offset lower government stimulus spending on refrigeration systems for ice rinks. The company’s total backlog now stands at $343 million, up over 21.2% from a year ago.
The company’s financial position is strong: its long term debt of $132.6 million is 8.8% of its market cap.
Toromont raised its quarterly dividend by 10.0% with the October 2011 payment, to $0.11 a share from $0.10. The shares now yield 2.2%. The stock trades at 13.8 times forecast its 2012 earnings of $1.45 a share.
Toromont is still a buy.
