TOROMONT INDUSTRIES LTD. $21.10 (Toronto symbol TIH; TSINetwork Rating: Extra Risk) (416-667-5511; www.toromont.com; Shares outstanding: 76.4 million; Market cap: $1.6 billion; Dividend yield: 2.3%) 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, the company completed the spinoff of Enerflex Ltd. (see below). Shareholders received shares of the new Toromont and shares of Enerflex.
In the three months ended June 30, 2012, higher equipment sales and rentals, particularly to mining customers, pushed up Toromont’s revenue by 10.1%, to $379.6 million from $344.6 million a year earlier. Without one-time items, earnings per share rose 9.7% to $0.34 from $0.31, on the higher sales and improved profit margins.
The company’s new order bookings rose 33% from a year ago, with increases in mining, power systems and refrigeration.
Toromont’s financial position is strong: its long-term debt of $213.7 million is 13.4% of its market cap.
The company raised its quarterly dividend by 9.1% with the April 2012 payment, to $0.12 a share from $0.11. The shares now yield 2.3%. The stock trades at 13.9 times Toromont’s forecast 2012 earnings of $1.52 a share.
Toromont is still a buy.
