Rising backlog spurs dividend hike

Article Excerpt

FINNING INTERNATIONAL INC. $36 is a buy. The company (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 149.3 million; Market cap: $5.4 billion; Price-to-sales ratio: 0.6; Dividend yield: 2.8%; TSINetwork Rating: Above Average; www.finning.com) sells and services Caterpillar-brand heavy equipment in Western Canada, South America, the U.K. and Ireland. 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 March 31, 2023, gained 23.5%, to $2.14 billion from $1.74 billion a year earlier. Per-share earnings before unusual items jumped 50.8%, to $0.89 from $0.59. Finning ended the quarter with a record equipment backlog of $2.7 billion, up 6% from the end of 2022. Thanks to that strong backlog, the company will raise your quarterly dividend by 5.9%. Starting with the June 2023 payment, investors will receive $0.25 a share instead of $0.236. The new annual rate of $1.00 yields 2.8%. Finning has now increased the annual dividend…