TFI International: Can This Hot Stock Keep its Recent Growth Streak Alive?

TFI International Inc. (TSX:TFII) has recently climbed to a 52-week high and it is well positioned to rise higher in 2023.

| More on:

Image source: Getty Images

The S&P/TSX Capped Industrials Index was down half a percentage point in early afternoon trading on February 14. Today, I want to zero in on one of the hottest stocks on the TSX that has thrived in this space. TFI International (TSX:TFII) is a Montreal-based company that provides transportation and logistics services in the United States, Canada, and Mexico. This is a growth stock that still has room to run in the weeks and months ahead.

Here’s how this stock has performed over the past year

Shares of TFI International have climbed 24% year over year at the time of this writing. The bulk of those gains have been achieved since January 1, 2023. TFI’s impressive run in the new year has vaulted the stock to a 52-week high over this past week. Investors who want to take a closer look at its recent performance can play with the interactive price chart below.

Why I’m excited about TFI International’s future

This company offers exposure to the burgeoning transportation and logistics space. That should pique investor interest in TFI International and its peers.

Market Research Future recently projected that the global freight and logistics market would deliver a compound annual growth rate of 4.3% from 2022 through to 2030. This market is set to benefit from an improvement in services that include delivery methods, value-added services, and order fulfillment.

Investors should be pleased with its recent earnings

TFI International unveiled its fourth-quarter (Q4) and full-year fiscal 2022 earnings on February 6. In Q4 2022, operating income increased 1% year over year to $216 million. Meanwhile, it delivered adjusted net income growth of 2% to $151 million. Adjusted diluted earnings per share (EPS) climbed 10% to $1.72. Moreover, net cash from operating activities surged 30% to $248 million.

For the full year, the company reported total revenue of $8.81 billion, which was up from $7.22 billion for the full year in fiscal 2021. EBITDA stands for earnings before interest, taxes, depreciation, and amortization. This measure aims to give a better picture of a company’s profitability. TFI International reported adjusted EBITDA of $1.42 billion in fiscal 2022 — up from $1.07 billion in the prior year.

The company reported adjusted net income of $731 million, or $8.02 per diluted share, for the full year in fiscal 2022. That was up from $498 million, or $5.23 per diluted share, for the same period in fiscal 2021. Net cash from operating activities rose to $971 million compared to $855 million in the previous year. Overall, TFI International put together a strong fiscal 2022, which should draw in investors, as we look ahead to its first-quarter results in 2023.

TFI International: Should you buy the stock today?

In Q4 2022, TFI International’s board of directors approved a quarterly dividend of $0.35 per share — up 30% from the previous year. That represents a modest 1.1% yield.

Shares of TFI International currently possess a favourable price-to-earnings ratio of 13. It is trading in more attractive value territory compared to its industry peers. This stock has had a terrific start to 2023, but it still offers very solid value at the time of this writing.

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 Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Investing

Hand arranging wood block stacking as step stair with arrow up.
Tech Stocks

3 Canadian Growth Stocks I’d Buy Under $30

These under $30 Canadian growth stocks are well-positioned to capitalize on mega trends such as e-commerce, the electrification of vehicles,…

Read more »

Gas pipelines
Stocks for Beginners

3 Reasons to Buy Enbridge Stock Like There’s No Tomorrow

Enbridge (TSX:ENB) is a superb long-term option. Here's why you should buy Enbridge stock right now and hold it for…

Read more »

money cash dividends
Dividend Stocks

This 8.39% Dividend Stock Can Pay $100 Cash Every Month

Consider investing in this monthly dividend stock at current levels to lock in high-yielding monthly distributions to create a good…

Read more »

Hand arranging wood block stacking as step stair with arrow up.
Tech Stocks

Why This Tech Stock Just Jumped 18%

This tech stock just saw shares surge after announcing it was being acquired, but more growth could still be in…

Read more »

Canadian flag

3 Top-Performing Canadian Stocks That Should Just Keep Winning

Given their healthy growth prospects and solid underlying businesses, the uptrend in these three top-performing Canadian stocks could continue.

Read more »

The sun sets behind a power source

3 Reasons to Buy Fortis Stock Like There’s No Tomorrow

As far as top dividend stocks are concerned, Fortis (TSX:FTS) remains a top option long-term investors should consider right now.

Read more »

growing plant shoots on stacked coins
Stocks for Beginners

1 Copper Stock to Buy as Copper Prices Shine

The price of copper continues to climb, and more copper production is on the way for this top stock up…

Read more »

TFSA (Tax free savings account) acronym on wooden cubes on the background of stacks of coins
Dividend Stocks

Here’s the Average TFSA Balance in 2024

The Bank of Montreal (TSX:BMO) says that the average TFSA balance is $41,510, far below the maximum.

Read more »