TFI International (TSX:TFII) has been on a hot streak as of late. The transportation and logistics company continues to rise with shares up 25% in the last year, and 15% in the last month alone.
Yet, while this often gets touted as a strong growth stock – which it is – it’s also a great dividend payer. So if you’re looking for a company to purchase as a growth stock with dividends, this is the one I’d go for.
Sustainable growth
TFI stock is a growth stock with more room to grow. Over the last year or so, I’m sure pretty much everyone was familiar with the supply-chain demand problem. TFI stock was a solution, providing transportation and logistics to companies across North America.
In fact, TFI stock continues to grow, with the company even making yet another acquisition in the last week! This is significant, as we’re entering a recession, and continue to face high interest rates and inflation. Yet, here is TFI stock, continuing to make purchases.
Furthermore, the company recently came out with strong earnings to consider. Fourth-quarter operating income came in up 1% over the last year at $216.9 million. Net income was up 6% as well, with diluted earnings per share (EPS) up 14%! On top of that, full-year diluted EPS came in far above 2021 levels of $7.91 to $9.02 per share.
Finally, and here’s the kicker, the board approved an insanely high 30% increase in quarterly dividend! That will bring the dividend to $1.88 per share annually!
How to create massive income and returns
Now there’s two things to look at here when considering TFI stock. First is its status as a growth stock. This growth pattern looks sustainable, but I would still look back on historical growth to see how far this company could climb.
Given that we’re entering a downturn, I would take a more conservative approach and see how the growth stock has climbed over the last decade. In this case, the company currently offers a compound annual growth rate (CAGR) of 21%. That’s still incredibly high, and may not last, so I would believe it would be lower than that.
On top of that, consider that the dividend has grown in the last decade as well. In that time, it’s offered a CAGR of 12%! We could certainly see this return for the next few years as well.
But what about right now? Let’s look at what an investment could bring investors if they were to purchase today.
What investors get today
Let’s say you have $60,000 to put towards TFI stock today. With that, you would get 357 shares on the market right now. Those shares would bring in a total of $671 each year in income. It’s broken down in the table below.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY |
| TFII | $168 | 357 | $1.88 | $671 | quarterly |
This is a large investment, true. But further consider that you get this cash each year, and on top of that could see another 21% climb in the next year alone! Furthermore, we could see further increases in the dividend. So let’s say we see a 21% climb, as well as a 12% climb in the dividend. You can see the math in the table below.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
| TFII | $203.23 | 357 | $2.11 | $753.27 | quarterly | $72,553.11 |
As you can see, now you’re getting $753.27 annually, and have made an extra $12,553.11 in returns from average growth! Which is why I would certainly consider TFI stock to be the top growth stock for both dividends and returns in the next year, at the very least.
