TFSA Value Picks: 1 Agriculture Giant to Own Forever

Cervus Equipment Corp. (TSX:CERV) is a leading equipment solutions provider to customers in agriculture, transportation, and industrial markets.

| More on:
edit Person using calculator next to charts and graphs

Image source: Getty Images.

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

Cervus Equipment (TSX:CERV) is a leading equipment solutions provider to customers in agriculture, transportation, and industrial markets across Canada, Australia, and New Zealand. Throughout the company’s territories and across diverse markets, Cervus dealerships are united by the sales and support of the market-leading equipment. The company operates over 60 Cervus dealerships and is the authorized representative of leading original equipment manufacturers (OEMs).

Further, Cervus operates an extensive product-support network, including a fleet of mobile service vehicles and over 500 service bays. One-third of the Cervus workforce of more than 1,500 dedicated employees is comprised of technicians with specialized skills to support customer equipment diagnostics, maintenance, and repair needs.

Market-focused business segments

The company operates through three market-focused business segments along with a corporate segment. Cervus’s corporate services, including strategic business development, legal, finance, information technology, human resources, accounting, payroll, and other support functions, are centralized at the company’s head office in Calgary, Alberta. These segments are managed separately, and strategic decisions are made on the basis of each division’s respective operating results.

The agriculture segment of Cervus’s business sells and services new and used agriculture and turf equipment manufactured by John Deere. John Deere agriculture equipment includes a full line of farm equipment and related parts and service, including tractors, combine harvesting equipment, tillage, seeding, nutrient management, and soil preparation machinery, sprayers, and hay and forage equipment. John Deere turf equipment includes lawn and garden tractors, compact utility tractors, and front mowers.

Value-added services

The transportation equipment segment of Cervus’s business sells and services the full line of new and used Peterbilt trucks, including road conventional, vocational, and medium-duty pick-up and delivery trucks. This segment consisted of 18 dealerships with four Peterbilt truck dealerships and one collision repair centre operating in Saskatchewan and 12 full-service Peterbilt truck dealerships and one parts and service centre operating in Ontario.

The industrial equipment segment of Cervus’s business includes material handling equipment dealerships. The products sold by Cervus include cushion tire forklifts, electric forklifts, multi directional forklifts, and narrow aisle forklifts. The segment also provides storage and racking equipment for warehousing, operator training, and preventative maintenance.

Several competitive advantages

The John Deere name and brand is one of Cervus’s largest competitive advantages. John Deere is among North America’s oldest and most respected brands. It is the world’s leading manufacturer of farm equipment and offers a complete line of farming services and solutions with products primarily sold and serviced through the agriculture industry’s largest dealer network. In addition, John Deere produces and markets North America’s broadest line of lawn and garden tractors, mowers, and other outdoor power products.

Also, the Peterbilt name and brand is a significant competitive advantage for Cervus. Peterbilt has established itself as a North American leader in the manufacture and delivery of transportation equipment. Cervus also sells several other established and well-known brands that specialize in construction and industrial products and equipment, such as Sellick, Clark, Doosan, JLG, and Baumann. The ability to use these brands makes Cervus a wonderful stock to own over the long term and could lead to market-beating returns.

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.

The Motley Fool has no position in any of the stocks mentioned. Fool contributor Nikhil Kumar has no position in any of the stocks mentioned.

More on Investing

Hands holding trophy cup on sky background

3 Growth Stocks That Could Be Huge Winners in the Next Decade and Beyond

Here are three top TSX growth stocks that may be worth a look, given the significant valuation declines these stocks…

Read more »

edit Back view of hugging couple standing with real estate agent in front of house for sale
Dividend Stocks

Why Real Estate Stocks Are a No-Brainer Addition to Your Portfolio

Real estate stocks, especially REITs, offer some distinct advantages over other types of stocks, making them must-have additions to most…

Read more »

Man data analyze
Stocks for Beginners

Beginners: 2 Market-Beating Stocks Just Getting Started

Brookfield Asset Management (TSX:BAM.A)(NYSE:BAM) and Constellation Software (TSX:CSU) are proven market beaters that could continue their ways.

Read more »

oil and natural gas
Energy Stocks

Small OPEC+ Oil-Output Hike: Buy More Energy Stocks?

Energy stocks could soar higher, because oil markets will remain tight due to the small production increase by OPEC+.

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

3 Top TSX Dividend Stocks to Buy for Monthly Passive Income

Top TSX stocks with monthly dividends now trade at cheap prices for investors seeking passive income.

Read more »

edit Person using calculator next to charts and graphs

Where to Invest $500 in the TSX Right Now

Long-term investors can look to buy stocks, including Suncor Energy and Shopify, as they are poised to outpace the broader…

Read more »

Canadian Dollars
Dividend Stocks

Create Free Passive Income and Turn it Into Thousands With 1 TSX Stock

If you can't afford to invest, you can certainly create passive income another way and use that to invest in…

Read more »

falling red arrow and lifting

2 Oversold TSX Stocks That Should Bounce Back

Stocks that are oversold without an external catalyst like a market crash or a weak sector might be risky buys,…

Read more »