Some of the best Canadian stocks to own are from companies that have a huge impact on the brands and products we interact with daily, yet we never see their names. You know the products you buy from the labels on the box, but how did those goods get from a factory or warehouse to the store?
Enter TFI International (TSX: TFII), one of the best Canadian stocks that you’ve probably never heard of.
TFI moves freight across North America through a large network of transportation and logistics businesses.
Source: Getty Images
What does TFI International actually do?
In short, TFI International helps other companies to move goods through North American markets in Canada, the U.S. and Mexico. The company’s operations are broken down into three main segments: less-than-truckload, truckload and logistics.
Less-than-truckload combines smaller shipments (hence less-than-truckload) from multiple customers along the same route. This means that a business can ship goods without needing to pay for the entire truck.
Truckload service is tasked with moving larger shipments that take up an entire trailer. Finally, the logistics segment helps customers arrange and manage freight movements.
How TFI operates these segments is through a network of subsidiary companies. That helps to explain why TFI International may come across as an unknown name.
In terms of growth, TFI has grown and expanded its reach through acquisitions. The company purchases transportation businesses and gives them access to the combined resources of the larger organization.
Why it could be one of the best Canadian stocks to consider
Moving freight is dependent on economic activity. Manufacturers need supplies, retailers need inventory, and businesses need ways to get products to their customers.
Fortunately, TFI isn’t reliant on any one type of shipment, and this adds some defensive appeal.
Turning to results, in the most recent quarter, TFI International reported revenue of US$2.3 billion. That reflects an impressive 12% year-over-year improvement. Operating income also saw a notable increase to US$220.4 million, which was a 29% improvement.
Even better, that increase in operating income wasn’t attributed to any single segment, but to all three. The company attributed that growth to higher revenue, better margins, and contributions from acquisitions.
That growth is reflected in TFI International’s stock price, too. As of the time of writing, the stock has soared over 38% over the trailing 12-month period.
Adding to that appeal is the quarterly dividend. While only offering a 1.5% yield, the company has provided upticks to that dividend going back for several years without fail.
Is TFI International worth buying?
TFI International gives investors a great way to own part of the North American freight network. The sheer scale and defensive appeal of the company make it an intriguing offer for would-be investors.
