The Toronto Stock Exchange posted several closing highs in June 2025, but the record run could come to a halt soon due to the escalating Middle East conflict. Some market observers warn that investors might be underpricing the impact of the war between two regional powers.
As of this writing, only two primary sectors (communications services and healthcare) have negative returns. Meanwhile, industrials (+3.53%) have shown resiliency thus far this year. Finning International (TSX:FTT) and Exchange Income Corporation (TSX:EIF), in particular, didn’t pull back but surged. The pair advanced +39.4% and +16.56%, respectively, in the last three months amid massive headwinds. Both are the top industrial stocks to buy this month.
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Established dividend grower
Finning International is a prominent dealer of industrial equipment in Canada. The $7.43 billion company is also the world’s largest Caterpillar dealer. It provides equipment, engine parts, and services to clients across vital industries.
In the first quarter (Q1) of 2025, revenue increased 9% year over year to $2.8 billion. Because of multiple large mining equipment orders in Canada, the equipment backlog grew 9% to $2.8 billion versus year-end 2024, setting an all-time record. While net income fell 13% to $104 million from a year ago, free cash flow (FCF) reached $135 million at the quarter’s end.
Its president and CEO, Kevin Parkers, described it as an excellent quarter for Finning. He said, “Our strong start to 2025 comes at a very important time. We remain steadfast in our commitment to executing our strategy to maximize product support, drive full-cycle resilience and grow our used, rental and power businesses to improve our return on invested capital.”
At $55.12 per share, current investors enjoy a +46.48% year-to-date gain on top of the 2.2% dividend yield. “We continue our strong commitment to returning capital to shareholders, and our board approved an increase in our quarterly dividend by 10%, marking our 24th consecutive year of growth,” Parkes added. The direct impact of tariffs has been limited as operations are primarily centred on Canada mining operations, its key business driver.
Collective strength
Exchange Income Corporation’s strength comes from its family of companies. The $2.96 billion has 19 subsidiaries that deliver essential products and services to niche markets, including medevac. Its two main operating segments, Aerospace & Aviation and Manufacturing, are the revenue contributors.
In Q1 2025, revenue and FCF increased 11% and 32% year-over-year to $668 million and $81 million, both new first-quarter records. Net earnings climbed 40% to $7 million compared to Q1 2024. “Our first-quarter results demonstrate the resiliency, stability and strength of our business model,” said Mike Pyle, CEO of EIC.
Pyle credits the essential characteristics and combined diversification for the record financial results, notwithstanding the wider economic uncertainty and reduced business. If you invest today, the share price is $57.31, with a corresponding dividend offer of 4.5%. EIC is popular with income-focused investors due to its monthly cash dividends and 17 dividend hikes in 20 years.
Quality investments
Finning International and Exchange Income Corporation are quality investments in the current economic landscape. Given the companies’ record results in the first quarter of 2025 and their strong business fundamentals, expect the stocks’ steady performance to be sustained.
