Canadians: Profit from Buying and Holding This 1 Stock for Decades!

AirBoss of America Corp’s share price has increased more than the S&P/TSX Composite in the past 23 years. Should you buy this stock for your RRSP or TFSA?

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

AirBoss (TSX:BOS) is a Canadian manufacturer of rubber-based products for the resource, military, automotive and industrial markets.

The company reports a market capitalization of $194 million with a 52-week high of $10.40 and a 52-week low of $7.07.

An interpretation of the numbers

For the nine months ended September 30, 2019, the company reports a strong balance sheet with USD$84 million in retained earnings, up from USD$81 million the previous year.

With intangible assets of USD$50 million, the company has tangible net worth (TNW) of USD$34 million. TNW represents the real value of the company. The company reports total debt of USD$69 million.

Revenue for the period is up marginally from USD$240 million in 2018 to USD$242 million in 2019 (+0.9%). Operating expenses are down slightly, which resulted in pre-tax income of USD$10.2 million, up from USD$9.8 million in 2018. After-tax income of $7.8 million. Investors should be pleased with this data as the company is consistently profitable.

Traditional cash flow (TCF) of USD$17.4 million, which is enough to cover the current portion of long-term debt of USD$5.1 million.

This is a good sign for investors, as it indicates that the company generates enough cash internally to meet its current debt obligations. The company repaid USD$4 million in debt in 2019 plus USD$3.7 million in dividends.

But wait, there’s more

Looking at the company’s notes to its financials indicate a couple of important items.

First, the company derives its revenues from rubber solutions, engineered products and unallocated corporate costs. For the nine months ended September 30, 2019, the company reports the majority of its revenues from engineered products (53%) followed by rubber solutions (47%) and unallocated corporate costs (0%).

This is good news for investors, as the company is not heavily dependent on one segment to generate sales. During an economic downturn, the company is somewhat insulated if a drop in demand occurs for one of its segments.

Second, the company is geographically diversified. Its net sales come from United States (73%) followed by Canada (17%) and other countries (10%).

This diversification is beneficial for investors as adverse economic conditions in one country can be mitigated by sales in other countries.

I’m a bit concerned about AirBoss’s concentration on the United States market as a downturn could result in a material change to its revenues. That said, AirBoss operates in a specialized industry, giving it some protection from the ebbs and flows of the economy.

Foolish takeaway

Investors looking to diversify their portfolio and purchase shares of a company for the long-term should consider buying shares of AirBoss.

Despite the modest decreases in the company’s share price in the past five years, the company continues to report solid financials, ultimately fuelling future growth.

Further, the company pays a healthy 3.38% dividend, which management is keen on maintaining, as evidenced by its increasing dividend payments since 2015.

The company is also diversified across segments and somewhat diversified geographically. Both factors allow the company to be somewhat insulated from the ebbs and flows of the economy.

AirBoss is a good choice for investors looking for a modest dividend and modest growth.

What Stocks Should You Add to Your Retirement Portfolio?

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now. The Top Stocks that made the cut could produce monster returns in the coming years, potentially setting you up for a more prosperous retirement.

Consider when "the eBay of Latin America," MercadoLibre, made this list on January 8, 2014 ... if you invested $1,000 at the time of our recommendation, you’d have $20,697.16*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Chen Liu has no position in any of the stocks mentioned.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Investing

Stocks for Beginners

Dip Buyers Could Win Big: The Best Canadian Stocks to Buy Now

These two growth stocks have taken hits recently, but their fundamentals remain strong, and their growth prospects are intact.

Read more »

A bull and bear face off.
Stock Market

Bear Market Bargains Emerge as Recession Stocks Return

If you want a deal, then go to the best stocks during a recession market dip.

Read more »

Canadian Red maple leaves seamless wallpaper pattern
Dividend Stocks

5 Canadian Dividend Stocks to Buy and Hold for the Next 20 Years

These Canadian stocks have paid dividends for decades, making them reliable investments to generate regular passive income.

Read more »

An investor uses a tablet
Stocks for Beginners

The Smartest Canadian Stock to Buy With $250 Right Now

Are you looking for the smartest Canadian stock to buy right now? Consider this gem and avoid market volatility.

Read more »

Dividend Stocks

3 Canadian REIT Stocks to Buy and Hold for the Next Quarter-Century

These three Canadian REITs trade cheaply and are highly reliable, making them some of the best stocks you can buy…

Read more »

Electricity transmission towers with orange glowing wires against night sky
Investing

Fortis Just Might Be the Best Canadian Dividend Stock to Buy in April

Let's dive into a few reasons why Canadian utility giant Fortis (TSX:FTS) still looks like a screaming buy heading into…

Read more »

A train passes Morant's curve in Banff National Park in the Canadian Rockies.
Dividend Stocks

1 Practically Perfect Canadian Stock Down 24% to Buy Now and Hold for Life!

CNR stock is a top Canadian stock for investors, especially with shares down on the TSX today.

Read more »

a man relaxes with his feet on a pile of books
Investing

Got $7,000? How I’d Spread It Across 5 Blue-Chip Stocks for an Investing Foundation

Spreading $7,000 across these five blue-chip stocks provides a solid foundation for long-term financial success.

Read more »