Finning International (TSX: FTT) is a Vancouver-based company that sells, services, and rents heavy equipment, engines, and related products in Canada, the United States, and around the world. Today, I want to go over five things investors should know about Finning International stock in the beginning of August 2023. Let’s jump in.
1. This TSX stock has been red hot over the past year!
Shares of Finning have jumped 13% month over month as of early afternoon trading on Tuesday, August 1. The stock has now climbed 36% so far in 2023. Meanwhile, its shares have increased 66% in the year-over-year period. Investors can see more of its recent performance with the interactive price chart below.
2. Finning’s industry is geared up for big growth over the long term
Construction equipment is very expensive to own and maintain. That often makes it more convenient for construction firms to rent from a company like Finning. Fortunately, this under-the-radar industry is geared up for strong growth over the medium and long term.
Grand View Research recently valued the global construction equipment rental market at US$187 billion in 2022. The same report forecasted that this industry would deliver a compound annual growth rate (CAGR) of 6.1% from 2023 through to 2030. It expects the market to reach a valuation of US$280 billion by the end of the forecast period. This is a market that investors should eagerly seek exposure to in August and beyond.
3. The company’s earnings have been fantastic lately
Investors can expect to see Finning’s second batch of fiscal 2023 results as markets open on August 9. In the first quarter (Q1) of fiscal 2023, this company reported total revenue of $2.4 billion and net revenue of $2.1 billion — up 22% and 23% compared to the previous year. Moreover, earnings per share (EPS) increased 51% year over year to $0.89. Revenue and earnings growth were powered by higher new equipment sales.
Finning reported a consolidated equipment backlog of $2.7 billion at the end of Q1. That was up 6% from what the company had posted back on December 31, 2022. EBIT stands for earnings before interest and taxes. This measure aims to give a clearer picture of a company’s profitability. In Q1, Finning reported adjusted EBIT of $216 million — up from $140 million in the prior year.
4. Investors should be attracted to Finning’s value in August
Shares of this TSX stock currently possess a price-to-earnings ratio of 13. That puts Finning in favourable value territory at the time of this writing. Its attractive value is impressive, considering the hot streak it has been on over the past year. Investors can still feel good about snatching up shares of Finning at its current price.
5. This TSX stock is a top Dividend Aristocrat
A Canadian Dividend Aristocrat is a stock that has achieved at least five consecutive years of dividend growth. Finning has achieved 21 consecutive years of dividend growth. That makes it one of the top Dividend Aristocrats available to Canadian investors. It last paid out a quarterly dividend of $0.25 per share. That represents a 2.1% yield.
