What if I told you there was a boring company quietly soaring in share price — one that provided a stellar opportunity for returns while seeing revenue climb higher and higher while barely even trying? Well, then, you’ve come to the right place.
Shares of TerraVest Industries (TSX:TVK) are up an incredible 486% in the last five years as of writing. That’s almost 500% in share growth, so you would think that it would be a huge hit on the TSX today. And yet, with a market cap of just $1.24 billion, it remains in small-cap territory. And that’s stellar news for today’s investor.
Boring is best
The reason investors should actually like TVK stock is because it’s boring. The company is a diversified industrial company that operates mainly in North America. The stock specializes in acquiring businesses involved in fuel containment, processing equipment, and services — industrial operations that the company can declare as its own.
The company aims to provide high-quality products and services while seeking out new opportunities as well. The company is already acquiring even more despite the higher interest rates and inflation data on hand.
Just this month, TVK stock announced the acquisition of Advanced Engineered Products, a leading manufacturer and service provider in Canada. While no information on financing has been put out yet, TVK stock has a strong history of finding these companies at valuable levels.
Evident in earnings
The way we can see just how valuable the company is will be by diving into earnings. TVK stock has seen growth quarter after quarter even as the market and economy remains in a difficult situation. So, let’s look at where the company has been over the last year.
The second quarter for TVK stock brought in $11,444 in net income, with sales at $176,858. By the third quarter, net income was down slightly to $9,576, with sales at $150,363. However, by the fourth quarter, net income rose once more to $15,527, with sales reaching $173,931.
Of course, the numbers are quite on the low side. Therefore, even with all this growth in share price behind it, the company still has a lot more growth to do over the next year or so—and that’s already underway.
Looking ahead
The full year for 2023 was a strong one, seeing an increase year over year across the board. Sales reached $678,350, with net income up to $49,633. Its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) also rose to $121,565 in 2023 from just $86,669 in 2022.
After looking at the cost of sales, the company managed to walk away with a profit of $165,959 in 2023, up from $124,386 in 2022. And this allowed the company to increase its dividend by 20% to $0.60 per share.
All this to say, there is more to come from TVK stock. The company has surged in share price, but that’s with very little institutional involvement. Only 19% of shares are currently held by institutions as of writing. Meanwhile, 32% are held by insiders, showing just how strongly management believes in the company.
Bottom line
The current economic environment is a tricky one. But it’s one TVK stock has managed to wade through without a hitch. Year after year, the company has seen more and more profit. Investing now could turn into the company you brag about investing in way back when. But that only happens if you buy it on the TSX today.
