Valued at a market cap of $3.35 billion, TerraVest Industries (TSX:TVK) has delivered outsized returns to shareholders over the past decade. Since December 2025, the TSX dividend stock has returned 2,360%. If we adjust for dividend reinvestments, cumulative returns are closer to 3,200%.
It means a $5,000 investment in TerraVest stock 10 years back would be worth $165,000 today. Despite these game-changing returns, TVK stock trades at a reasonable multiple, making it a top investment right now.
While TerraVest is unlikely to replicate its historical gains, let’s see why I’m bullish on this mid-cap stock right now.
The bull case of investing in this TSX stock
TerraVest Industries manufactures specialized equipment and provides services across energy, agriculture, mining, and industrial sectors in North America and internationally.
The company operates through four segments:
- HVAC Equipment, which produces fuel tanks, furnaces, and air conditioning systems.
- Compressed Gas Equipment, which makes storage tanks, transport trailers, and dispensing systems for propane, natural gas, and industrial gases.
- Processing Equipment, which manufactures wellhead equipment, water treatment systems, and biogas production units
- Service, which provides water management, environmental and rental solutions.
TerraVest Industries delivered explosive growth in fiscal 2025 (ended in September), driven by organic growth and acquisitions. In the fiscal fourth quarter (Q4) of 2025, it reported revenue of $419.4 million, up 82% year over year. Moreover, sales for fiscal 2025 rose 50% to $1.37 billion, while net income grew by 34% to $98.4 million.
These headline numbers reflect significant inorganic growth, given that it completed six acquisitions in fiscal 2025, across verticals such as transportation equipment and water services.
Stripping out the major recent deals reveals a more modest underlying picture as TerraVest’s base portfolio businesses grew sales by 7% in the fourth quarter and 1% for the full year on an organic basis.
Management attributed this to higher demand in HVAC equipment and services offset by softer markets for storage tanks, certain compressed gas transportation products, and energy processing equipment.
Its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) surged 72% to $81.9 million in the quarter and 40% to $264.6 million for the year, which indicates that acquired businesses carry healthy margins.
Recent tariff uncertainty has created headwinds for some product lines, though management emphasized that TerraVest predominantly manufactures for domestic markets, which limits tariff exposure.
Despite strong earnings growth, TerraVest’s operating cash flow fell 29% year over year to $111.1 million. The decline was tied to additional interest and tax payments, along with unfavourable working capital swings (rising inventory levels, customer deposits, and receivables) that consumed cash as the business scaled.
TerraVest invested $20.7 million in property and equipment during the fourth quarter, with $13.8 million categorized as growth capital for new manufacturing lines and service business expansion.
The company refinanced its credit facility in March 2025, positioning itself to continue its acquisition strategy, which has rapidly transformed its scale and market position across North American industrial equipment markets.
Is the Canadian stock still undervalued?
Analysts tracking TerraVest stock forecast revenue to increase from $1.37 billion in fiscal 2025 to $2.05 billion in fiscal 2027. In this period, adjusted earnings are forecast to expand from $3.03 per share to $5.91 per share.
If the Canadian stock is priced at 38 times forward earnings, which is in line with its five-year average, it should gain 46% over the next 12 months. Given consensus price targets, TVK stock trades at a 20% discount in December 2025.
