I often think if I were to get into any area of trade, it would be shipping and receiving. It’s something we’ve needed not just through the last few hundred years even, but the last few thousand. This goes to show that no matter what, we’re going to need stuff transported. And we’re going to need it as fast as possible.
Yet, I’m not here to talk about new ways of getting into this industry. Far from it. I’m here to talk about the best of the best. One company that’s been around the block a few times and growing strong. That’s TFI International (TSX:TFII) stock. So let’s look at reasons why investors should want to pick up TFI stock like there’s no tomorrow.
Image source: Getty Images
Recent reports
To show that TFI stock continues to do well even during trying times, it’s important to consider recent earnings. That would be the company’s fourth quarter and full-year earnings. And they were quite strong, so strong in fact that TFI stock increased the dividend by a whopping 14%!
Shares increased after the company reported earnings in February, announcing fourth-quarter operating income at US$198.3 million. This was down from US$216.9 million the year before. While this wasn’t great, thanks to lower freight demand, the company’s full-year earnings provided some strength. And now, the company is looking to see more of an increase.
Meanwhile, full-year results came in at US$7.5 billion for the year, and this too was down thanks to weaker demand. All in all, it should have been a weak year. And it was. But now, the company is stating it’s in the midst of a turnaround, which is exactly why investors should buy.
Management in focus
When it comes to management, it’s an important factor that investors may not consider as much these days. And they should! Especially during downturns. What are executives going to do to get us out of this funk? Well, chief executive officer Alain Bédard had an answer for that.
Bédard has a long and successful track record in the transportation industry in general. He’s known for strategic vision, focusing on operational efficiency. Furthermore, he has been able to identify and execute quite strong acquisitions.
This has proven to be successful in the past, and should be again thanks to more acquisitions the company announced over the last year. These would allow TFI stock to focus less on buying new fleets and upgrading them, and instead taking them over.
Future growth opportunity
TFI stock saw a surge during the pandemic when consumerism was high. This shrank back with higher inflation and interest rates. Well, 2023 was bad. But 2024 is going to be great. The company is set up with a major acquisition, and is ready to meet the increase in demand that’s coming their way.
What’s more, analysts believe this should happen as soon as the second half of this year. Especially in terms of the freight market in general. That macro issue out of the way, investors can go micro.
And in this case, TFI stock remains a solid performer. It generates strong free cash flow, long-term contracts, and profitability. It’s an all around strong performer that will likely have more strong acquisitions in its future as well.
So with shares up 19% in the last year, trading at $25.45 over the last year, and a 1.08% dividend yield, it looks like a strong stock to buy in bulk.
