TOROMONT INDUSTRIES LTD. $22.58 - Toronto symbol TIH

TOROMONT INDUSTRIES LTD. $22.58 (Toronto symbol TIH; TSINetwork Rating: Extra Risk) (416-667- 5511; www.toromont.com; Shares outstanding: 76.6 million; Market cap: $1.7 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.

The company completed the spinoff of Enerflex Ltd. (see below) in July 2011. Shareholders received shares of the new Toromont and shares of Enerflex.

In the three months ended March 31, 2013, higher equipment sales and rentals, particularly to mining customers, pushed up Toromont’s revenue by 11.3%, to $313.1 million from $281.5 million a year earlier.

Earnings per share rose 4.5%, to $0.23 from $0.22, on the higher sales and improved profit margins.

The company’s financial position is strong: its $169.0 million of long-term debt is just 9.9% of its market cap. The stock trades at 14.1 times Toromont’s forecast 2013 earnings of $1.60 a share.

Toromont raised its quarterly dividend by 8.3% with the April 2013 payment, to $0.13 a share from $0.12. The shares now yield 2.3%.

Toromont is still a buy.

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