TFI International (TSX:TFII) was one of those companies that soared up, only to come crashing down in the last few years. The pandemic left the company struggling. However, that soon turned around as ecommerce grew. Yet in the last two years, with the market sinking, TFI stock became another company investors weren’t sure what to do with.
So today, let’s look at TFI stock and see whether now is in fact the time to buy, or if investors should hold out for more.
Turning around
TFI stock has been touted by multiple analysts recently as one of the stocks that could be a “favourite” in the area of shipping companies. In fact, some believe it’s already on the path back to 52-week highs.
The company continues to trade with strong valuations relative to its peers. Furthermore, it has been resilient in a difficult market, retained a strong balance sheet, and seen an increase in its operations.
Such strength has led some analysts to believe that acquisitions could be in the future for the stock. This has put TFI stock into a very positive light, marking a shift that could see a large increase in the freight market through the second half of 2024.
What we could see
Analysts have pointed out what we should be able to see in 2024 and beyond. TFI stock should continue to improve its margins, especially through the less-than-truckload segment in the United States. So while the immediate future looks a bit softer in terms of growth, growth should increase significantly in coming quarters.
As prices stabilize, the next move will be to see an increase in freight demand. So while there should be modest revenue growth in 2024, even more should come after that. Especially as costs come down and operating efficiencies improve.
For now, TFI stock trades at 1.3 times sales, 18.9 times earnings, 3.7 times book value, with shares up 12.5% year to date as of writing. However, shares are also down 16% since hitting 52-week highs. So there is still a lot of value to get.
How much value?
It’s important to note that TFI stock has a dividend. It may be small at 1.23% as of writing, but that’s certainly something to grab while you can. The average dividend yield for the last five years is at 1.52%, but in the last year remained at around 0.90%. So this could mean we’re about to see more dividend increases to get back to normal.
Meanwhile, shares continue to trend back upwards. After bottoming out in October, shares are now up 9% since that time. And with positive analyst ratings, that looks like it will continue. So here is what investors could get if we see shares return to 52-week highs, and adding in that passive dividend income.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | PORTFOLIO TOTAL |
| TFII – now | $154 | 32 | $1.91 | $61.12 | quarterly | $5,000 |
| TFII – highs | $188 | 32 | $1.91 | $61.12 | quarterly | $6,016 |
If you were to see shares return to those highs, investors could grab hold of $1,016 in returns and $61.12 in dividend income. That’s total passive income of $1,077.12! And as the company improves, that income should only rise higher.
