Updating Finning International Inc.

Article Excerpt

FINNING INTERNATIONAL INC. $32 (Toronto symbol FTT; Cyclical-Growth Payer Portfolio, Manufacturing & Industry sector; Shares outstanding: 168.2 million; Market cap: $5.4 billion; Dividend yield: 2.5%; Dividend Sustainability Rating: Above Average; www.finning.com) sells and services Caterpillar-brand heavy equipment in Canada, South America and the U.K. Finning increased its quarterly dividend by 5.3% with the June 2018 payment. Investors now receive $0.20 a share instead of $0.19. The new annual rate of $0.80 yields 2.5%. In the three months ended June 30, 2018, the company’s revenue rose 9.2%, to $1.73 billion from $1.58 billion a year earlier. Over 80% of the higher revenue came from its Canadian operations, which continue to see strong demand from construction and mining clients. Revenue from South America also rose 6.8%, as stronger demand in Chile offset weaker sales in Argentina. The U.K. division saw its revenue fall 2.5%, due to delays in delivering certain construction equipment. Finning also continues to benefit from its 2014 restructuring plan, which has cut $200 million from…

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