Sometimes, the best long-term opportunities come wrapped in short-term disappointment. TFI International (TSX:TFII) has been caught in a 52-week slide, down more than 40% from its highs. That’s the kind of drop that can scare investors away. But for patient buyers, it might be the exact moment to step in. This is a Canadian stock with a long track record of turning market slowdowns into future growth, and it has the balance sheet, cash flow, and discipline to keep doing just that.
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About TFII
TFI International is one of North America’s largest transportation and logistics providers, with operations spanning truckload, less-than-truckload, logistics, and package and courier services. Based in Montreal, it has grown through acquisitions and operational efficiency, giving it a scale advantage over smaller competitors. This isn’t a flashy business, but it’s one that moves the economy (literally) and that makes it a powerful long-term compounding machine when managed well.
The latest quarter shows why the Canadian stock has fallen, but also why it still deserves a spot in a buy-and-hold portfolio. Revenue for the second quarter (Q2) of 2025 came in at US$2.04 billion, down from US$2.26 billion a year ago. Weaker end-market demand hit volumes across all segments, with less-than-truckload revenue off 13% and logistics down 12%. Adjusted earnings per share (EPS) fell to US$1.34 from US$1.71. On the surface, those declines are hard to cheer for.
But the underlying story is much stronger than the headlines suggest. TFI still managed to generate US$182 million in free cash flow in the quarter, a 20% increase year over year, thanks to margin discipline and cost control. Operating income fell, but not nearly as sharply as revenue, showing management’s ability to protect profitability even in a downturn.
Looking ahead
Management is also using the slowdown as an opportunity to fine-tune operations and focus on higher-quality revenue. CEO Alain Bédard highlighted a sharpened emphasis on fundamentals, being more selective about freight and more efficient in moving it. That’s the kind of thinking that pays off when demand recovers. And in trucking, demand always recovers eventually.
Shareholders benefit in the meantime. The Canadian stock paid a dividend that currently yields about 2.1%, up from its five-year average of 1.2%. The payout ratio sits near 40%, leaving room for further increases. TFI is also buying back shares, which means investors are getting a larger slice of the pie over time. With over US$1 billion in annual operating cash flow, there’s no question about the sustainability of these returns.
Valuation adds to the appeal. The stock trades at around 19 times forward earnings, which is not dirt cheap but sits well below where it was before the drop. Given its scale, profitability, and cash generation, that’s a fair price for a long-term position. When freight markets rebound, earnings could snap back faster than most expect, making today’s multiple look like a bargain in hindsight.
Foolish takeaway
There are risks, of course. Prolonged weakness in the North American economy could keep freight volumes low for longer than anticipated. Competition is fierce, and fuel costs, though largely passed through to customers, can still squeeze margins if they move sharply. Acquisitions, a key growth lever for TFI, always carry integration risks. These are worth watching, but the Canadian stock’s decades-long track record of navigating similar challenges should give investors some comfort.
If you’re looking for a Canadian stock you can tuck away and not worry about for the next decade, TFI International fits the bill. It’s not about chasing a quick rebound, but about owning a best-in-class operator with the financial strength to weather storms and emerge stronger. The market is pricing in a lot of short-term pain right now. That pain may be real, but so is the long-term opportunity for those willing to hold on.
