Is TFI Stock a Buy as It Re-approaches All-Time Highs?

TFI stock (TSX:TFII) is rising back upwards, but is still down about 12% from all-time highs. So is it time to buy and get a bump?

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Shares of TFI International (TSX:TFII) continue to climb higher and higher. In fact, shares of the transportation and logistics company passed all-time highs this year, and are creeping back! TFI stock has seen its shares jump 37% in the last year, but still offer a bit of wiggle room. That’s because shares are still down from all-time highs, down by about 12% as of writing.

So, is it time to buy TFI stock as it gets closer to all-time highs?

Finances

To determine whether TFI stock is a buy, let’s first go over its earnings and financial health. TFI stock reported robust earnings for the first quarter of 2024. The company posted net income of $147.4 million, or $1.69 per diluted share, which represents a significant year-over-year increase. Revenue for the quarter was $2.1 billion, reflecting both organic growth and contributions from recent acquisitions.

Furthermore, key factors driving this performance include strong operational execution, cost management, and the successful integration of acquired businesses. The company’s focus on high-margin segments, particularly in less-than-truckload (LTL) and logistics, has paid off.

Then there’s the company’s balance sheet. TFI stock maintains a healthy balance sheet with manageable debt levels and strong cash flow generation. This financial stability allows the company to invest in growth opportunities and return capital to shareholders through dividends and share buybacks.

Valuation

Even though TFI stock is hitting all-time highs, or at least surging back, that doesn’t mean it isn’t valuable. In fact, reaching highs merely reflects strong investor confidence following its recent earnings report. Over the past year, the stock has seen a steady upward trajectory, driven by consistent earnings growth and positive market sentiment.

What’s more, the price-to-earnings (P/E) ratio for TFI International is currently 24.9, which is reasonable considering the company’s growth prospects. This valuation is in line with industry peers and suggests that the stock is not overly expensive.

Add in that TFI stock also has a dividend yield currently at 1.2%. While not high, it indicates a commitment to returning value to shareholders. The dividend is well-supported by the company’s earnings and cash flow.

Outlook

This is all well and good for now, but what about the future? The logistics and transportation industry is poised for continued growth, driven by increasing e-commerce activity, supply chain optimization, and economic recovery. TFI International, with its diversified service offerings and strong market position, is well-positioned to capitalize on these trends.

Furthermore, TFI International continues to pursue strategic acquisitions to enhance its market presence and service capabilities. The company’s disciplined approach to mergers and acquisitions has historically resulted in value-accretive deals. Add in its scale, efficiency, and investments in technology, and it certainly looks like a strong stock to consider.

Bottom line

So, is TFI stock a buy even at these heights? TFI stock has demonstrated strong financial performance, effective cost management, and successful execution of its growth strategy. The company’s healthy balance sheet, reasonable valuation, and positive industry outlook further support the investment case.

Yet, of course, there are always other factors to consider. Potential risks include macroeconomic uncertainties, regulatory changes, and integration challenges related to acquisitions. Yet given the recent strong earnings, positive industry outlook, and reasonable valuation, TFI International stock appears to be a good buy even at all-time weekly highs.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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