Rising backlogs point to future gains

Article Excerpt

As economies re-open, Finning and Toromont are seeing higher demand for their heavy equipment. Those rising orders will fuel their earnings and dividends in 2021. FINNING INTERNATIONAL INC. $33 is a buy. The company (Toronto symbol FTT; Cyclical-Growth Payer Portfolio, Manufacturing & Industry sector; Shares outstanding: 162.1 million; Market cap: $5.3 billion; Dividend yield: 2.5%; Dividend Sustainability Rating: Above Average; www.finning.com) sells and services Caterpillar-brand heavy equipment in Western Canada, South America and the U.K. It is the largest Caterpillar dealer in the world. Its main customers are in the oil and gas industry but also mining, forestry-products and construction. Finning last raised its quarterly payment in June 2019 by 2.5%. The annual rate of $0.82 yields a solid 2.5%. Finning has paid dividends since 1970. The company’s revenue in the three months ended December 31, 2020, fell 12.9%, to $1.55 billion from $1.78 billion a year earlier. Sales were lower due to reduced business in Canada and South America, offset by increased revenue in the U.K….