Demand for services cuts their cyclical risk

Article Excerpt

The rebound in construction activity in the wake of the COVID-19 pandemic continues to push up earnings at these two dealers of bulldozers, backhoes and other heavy equipment. Those higher sales are also increasing long-term demand for their maintenance and repair services. FINNING INTERNATIONAL INC. $44 is a buy. The company (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing sector; Shares outstanding: 149.3 million; Market cap: $6.6 billion; Price-to-sales ratio: 0.7; Dividend yield: 2.3%; TSINetwork Rating: Above Average; sells and services Caterpillar-brand heavy equipment in Western Canada, South America, the U.K. and Ireland. Its main customers are in the oil and gas, mining, forestry products, and construction industries. The company continues to benefit from the re-opening of the world’s economies and increased demand for its equipment and services. Revenue in the three months ended June 30, 2023, gained 27.7%, to $2.56 billion from $2.00 billion a year earlier. Per-share earnings also rose 25.0%, to $1.00 from $0.80. Investors can expect the company to earn $3.74 a..