Toromont acts as an indispensable play on Canada’s essential physical economy. By holding an exclusive Caterpillar dealership territory across Ontario, Quebec, the Maritimes, and Nunavut, the company maintains a structural geographic monopoly on the infrastructure, roadbuilding, and mining projects that define long-term capital spending. Even if new machine sales encounter a temporary macroeconomic lull, the company’s massive installed base generates high-margin, sticky product support and recurring service revenues that defend corporate cash flows through thick and thin.
The stock trades at 30.5 times the company’s forward earnings forecast. That’s high, but this multiple is strongly supported by an immaculate 37-year consecutive streak of dividend increases and a massive 44.0% surge in order bookings that guarantees visible, near-term top-line realization.
TOROMONT INDUSTRIES LTD. (Toronto symbol TIH) distributes a broad range of Caterpillar and other branded industrial equipment (such as bulldozers, backhoe loaders and drills) in eastern Canada and the Eastern Seaboard of the U.S. It also makes refrigeration systems through its CIMCO business.
Toromont is building a new remanufacturing plant (re-building used equipment back to the standards of new equipment) in Saint-Augustin-de-Desmaures, Quebec. Remanufacturing helps extend the life of the heavy equipment Toromont sells and services by restoring worn components and refurbishing machines. This new facility will cost $55 million and should open in mid-2027.
Offering more remanufacturing services will help Toromont tap into rising demand for its construction equipment and maintenance services as governments spend more on public infrastructure projects.
Toromont beats expectations as demand surges
In the quarter ended March 31, 2026, Toromont’s revenue rose 12.8%, to $1.23 billion from $1.09 billion a year earlier. That topped the $1.17 billion consensus forecast.
Revenue at the Equipment Group (92% of the total) rose 13.7% thanks to the AVL purchase (it contributed $129.0 million) and stronger demand for new equipment from construction companies. That offset lower demand from mining companies. CIMCO’s revenue (8%) also improved 2.7%.
Toromont’s earnings in the quarter gained 24.2%, to $1.13 a share (or a total of $92.7 million) from $0.91 a share (or $74.4 million). That also beat the consensus estimate of $1.07 a share.
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Toromont owns 80% of AVL Manufacturing Inc. With plants in Hamilton, Ontario, and Charlotte, North Carolina, this firm makes specialized enclosures for power generators and heating equipment. It sells these products to industrial customers in eastern North America, including oil and gas producers, automakers, construction firms and datacentre operators.
The company’s Power Systems business, which includes AVL, has now secured firm orders worth $1 billion, which it expects to deliver in 2027. As of March 31, 2026, this business alone had an order backlog of $770 million.
That strong demand will help lift Toromont’s revenue in 2026 by 9% to about $5.7 billion. Earnings could also improve 16% to $7.04 a share, and the stock trades at 30.5 times that forecast. While the multiple is high, it’s acceptable considering Toromont’s high market share and rising government spending on infrastructure projects.
The company last raised your quarterly dividend by 7.7% with the April 2026 payment. Shareholders now receive $0.56 a share instead of $0.52. The new annual rate of $2.24 yields 1.0%.
Toromont has paid regular dividends since it went public in 1968 and has raised the annual rate each of the past 37 years. Including this latest increase, the company has lifted its dividend 12.6% annually over the last 5 years. Its TSI Dividend Sustainability Rating is Above Average.
Recommendation in The Successful Investor: Toromont Industries Ltd. is a buy for aggressive investors.
