Is TFI International a Can’t-Miss Stock?

Here’s why TFI International (TSX:TFII)(NYSE:TFII) stock could be worth buying today.

| More on:
question marks written reminders tickets

Image source: Getty Images

TFI International (TSX:TFII)(NYSE:TFII) stock has more than doubled in 2021, making it one of the best-performing TSX stocks this year. Currently, the stock is trading with about 106% year-to-date gains at $134.44 per share compared to a 19% rise in the TSX Composite benchmark.

Let’s look at some key reasons that might have driven this strong rally in TFII stock and find out whether it’s still worth buying for the long term.

TFII stock continues to rally in 2021

TFI International is a Saint-Laurent-based transportation and logistics services provider with its main focus on the United States and Mexico apart from its home market.

The ongoing growth trend in this $12.5 billion company’s financials looks very impressive. Last year, when most businesses struggled with COVID-19-related restrictions, TFI’s bottom line continued to grow positively. In 2020, the company reported an adjusted net profit of about US$300 million — about 18.2% higher than its net profit of US$254 million in the previous year. Similarly, its adjusted net profit margin expanded from 6.5% in 2019 to 7.9% in 2020. These were the primary reasons why TFII stock surged by about 50% last year, ending the third straight year in the green territory.

The year 2021 has been even better for TFI as improving business environment and easing restrictions have boosted the demand for its services. The stronger demand drove its total revenue up by 124% YoY (year over year) in the September quarter to US$2.1 billion — also 10% higher than analysts’ expectation of US$1.9 billion. Similarly, its adjusted earnings for the quarter jumped 56% YoY to US$1.46 per share — also beating Street’s estimates by 16%. These solid growth figures justify why TFII stock price has consistently surged for the last four years.

But could the company’s stock maintain this optimism in the coming years? Let’s find out.

Could TFI International stock inch up further?

In addition to its strong organic growth figures, TFI International also focuses on quality acquisitions. These acquisition deals are likely to help the company keep its strong financial growth trend intact while expanding its business presence even faster in the long term.

To give a recent example, TFI, on November 29, acquired an American transportation firm called D&D Sexton, which owns about 400 refrigerated and dry van trailers apart from 120 tractors. This deal will strengthen TFI’s foothold in the temperature-controlled transportation segment and contribute to its financial growth.

Such deals clearly reflect TFI management’s intentions to aggressively expand the company to accelerate the pace of financial growth and grow its customer base. Given that, I’m not surprised that analysts expect it to continue reporting strong double-digit earnings growth in the next couple of years.

Moreover, the management remains focused on maximizing efficiencies with more such strategy acquisition opportunities in the coming years, which could boost its profitability further. These are some of the reasons why I find TFI International stock worth buying for the long term, even after its strong year-to-date rally.

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 Jitendra Parashar has no position in any of the stocks mentioned.

More on Stocks for Beginners

young woman celebrating a victory while working with mobile phone in the office
Dividend Stocks

This Dividend Stock Just Jumped 10%! Time to Buy?

This dividend stock is way up after being included in a major index, making it a prime time to pick…

Read more »

Pile of Canadian dollar bills in various denominations
Stocks for Beginners

Up 94% in 2024! 3 Reasons Celestica Stock Is (Still) a Screaming Buy Today

Here are the top three reasons that could help Celestica stock continue soaring in the long run.

Read more »

sale discount best price
Stocks for Beginners

Time to Pounce: 1 Phenomenal TSX Stock That Hasn’t Been This Cheap in a While 

Buying the dip of a phenomenal cyclical stock could generate fantastic returns. Here is a cheap TSX stock in its…

Read more »

financial freedom sign
Stocks for Beginners

Could This Undervalued Stock Make You a Millionaire One Day? 

The TSX has good millionaire-maker stocks if you wait. This futuristic stock might look undervalued once you see its growth…

Read more »

Aerial view of a wind farm
Energy Stocks

Brookfield Renewable Stock Climbs Higher: Time to Buy?

Brookfield Renewable stock (TSX:BEP.UN) continues to climb, but remains below the $40 mark. But that share price looks in view.

Read more »

Automated vehicles
Stocks for Beginners

Why Shares of Boyd Stock Flew Higher This Week

Boyd stock (TSX:BYD) has been rising higher on the back of improving credit and higher analyst ratings, so it could…

Read more »

Woman has an idea
Stocks for Beginners

Hot Stocks for a Hot Month: Best TSX Stocks to Buy in June 2024

As summer approaches and interest rates decline, you might want to consider adding these two hot TSX stocks to your…

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Stocks for Beginners

How to Turn Your TFSA Into a Gold Mine Starting With $10,000 

What is the worth of $10,000? If you spend it today, it is worth $10,000. However, if you invest it…

Read more »