TOROMONT INDUSTRIES LTD. $21.77 - Toronto symbol TIH

TOROMONT INDUSTRIES LTD. $21.77 (Toronto symbol TIH; TSINetwork Rating: Extra Risk) (416-667-5511; www.toromont.com; Shares outstanding: 76.3 million; Market cap: $1.6 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, the company completed the spinoff of Enerflex Ltd. (see at right). Shareholders received shares of the new Toromont and shares of Enerflex. Sales and profits keep rising In the quarter ended September 30, 2012, higher equipment sales and rentals, particularly to mining companies, pushed up Toromont’s revenue by 13.0%, to $415.0 million from $367.3 million a year earlier. Earnings per share rose 7.5%, to $0.43 from $0.40, due to the higher sales and improved profit margins. Toromont’s equipment group booked $108 million of new orders in the latest quarter, down 42% from a year ago. That’s mainly because the division received a number of significant one-time mining orders last year. Construction activity also slowed in the latest quarter. The CIMCO division booked $22 million of new orders, up 34% from a year ago. The increase included a large order from Maple Leaf Foods (symbol MFI on Toronto), which is currently expanding some of its plants. Toromont’s financial position is strong: its $216.3 million of long-term debt is just 13.5% of its market cap. The stock trades at 14.0 times the company’s forecast 2013 earnings of $1.55 a share. Toromont is still a buy.

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