Heavy-equipment dealers see higher demand

Article Excerpt

These two distributors of Caterpillar heavy equipment continue to see strong cyclical demand for their products. That has pushed up their share prices, but these stocks are still attractive in relation to their projected earnings. FINNING INTERNATIONAL INC. $32 (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 168.4 million; Market cap: $5.4 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.4%; TSINetwork Rating: Above Average; www.finning.com) sells and services Caterpillar-brand heavy equipment in Western Canada, South America and the U.K. Finning continues to benefit from its 2014 restructuring plan, which has cut $200 million from the company’s annual costs. The savings mainly come from job cuts and facility closures. In the three months ended June 30, 2018, overall earnings soared 47.3%, to $81 million from $55 million a year earlier. Due to more shares outstanding, per-share earnings gained 45.5%, to $0.48 from $0.33. Thanks to rising commodity prices, which have pushed up demand from oil and mining companies, revenue in the quarter rose 9.2%,…

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