TOROMONT INDUSTRIES LTD. $27.71 - Toronto symbol TIH

TOROMONT INDUSTRIES LTD. $27.71 (Toronto symbol TIH; TSINetwork Rating: Extra Risk) (416-667- 5511; www.toromont.com; Shares outstanding: 77.1 million; Market cap: $2.1 billion; Dividend yield: 2.2%) distributes a broad range of industrial equipment, including machinery made by Caterpillar Inc. It also makes refrigeration systems through its CIMCO division.

The company completed the spinoff of Enerflex Ltd. (see right) in 2011. Shareholders received shares of both the new Toromont Industries and Enerflex.
In the three months ended September 30, 2014, Toromont’s revenue fell 6.2%, to $467.4 million from $498.3 million a year earlier.
Earnings declined 7.9%, to $40.0 million from $43.5 million. Per-share earnings fell 8.8%, to $0.52 from $0.57, on more shares outstanding.
The lower results were mostly because the year earlier quarter included Toromont’s biggest-ever mining order: an $82-million delivery to the Baffinland iron ore project.
Steadily paying down debt
Toromont’s financial position is strong: its $129.8 million of long-term debt—down from $150.3 million a year ago—represents just 6.2% of its market cap. The stock yields 2.2%.
The company needs an improving global economy to fuel demand from its mining customers. But it’s well positioned to profit when those markets rebound. Meanwhile, it’s benefiting from steady construction and power markets. The stock trades at 15.5 times Toromont’s forecast 2015 earnings of $1.79 a share.
Toromont is still a buy.

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