BC Business
The Vancouver-based industrial stock popped 12.6 percent earlier this month after reporting better-than-expected results
The stock: U.S. president Donald Trump’s recent broadsides to international trade have a lot of investors on edge. At a time when markets look fully valued, tariffs threaten to upend the fortunes of a great many stocks whose profitability rests on a free flow of goods across the 49th Parallel.
Where to turn? For your consideration, we suggest Finning International (TSX:FTT). The Vancouver-based company is the world’s largest seller and servicer of Caterpillar equipment, conveniently operating in Western Canada, South America and the British Isles. And following the release of an unexpectedly upbeat 2024 fourth-quarter and year-end financial report, its stock jumped 12.6 percent on February 5. Closing at $44.49 on Tuesday (February 18), FTT is up 29 percent over the past year and approaching its all-time high.
The drivers: Finning’s revenue topped $10 billion for the first time in 2024, with net income of $509 million or $3.62 per share. The company is playing both sides of the energy transition, benefiting from steady activity in Canada’s oil sands on the one hand and the ramp-up of Chile’s copper mines made necessary by growing sales of electric vehicles on the other.
On the opposite side of the ledger, for more than a decade Finning has been chipping away at its cost structure. It’s trimmed its executive head count by 20 percent since 2022 and invested in its digital platform. Sales, general and administrative expenses hit a new low of 16.3 percent of net revenue in Q4.
Yet still its shares are reasonably priced, with a trailing price-to-earnings ratio of 12.2 and a 2.5-percent dividend yield. The company has increased its dividend for 23 consecutive years.
Word on the street: RBC Dominion Securities analysts Sabahat Khan, Arthur Nagorny and Eddy Gao boosted their price target by $3 to $49 and reiterated their “outperform” rating following the earnings release on February 4. “Q4 revenue and EPS were above consensus, with in-line to better-than-expected contribution from each of the three regional segments,” they wrote. “The business appears to be well positioned in 2025, with potential for upside to our forecasts if the product support mix improves year over year.”
Coming and going: Fortuna Mining Corp. (TSX:FVI) has sold its San Jose silver mine in Mexico to Compania Minera Cuzcatlan S.A. as part of an ongoing transition away from silver toward more gold production focused on West Africa. The Vancouver-based company changed its name to Fortuna Mining from Fortuna Silver last June.