Bombardier (TSX:BBD) & TFI International (TSX:TFII): 2 Industrial Stocks Gaining Traction - Kalkine Media

October 14, 2020 07:36 AM EDT | By Team Kalkine Media
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Summary

  • Bombardier’s revenues saw a sharp fall in the second quarter of 2020 to C$2.7 billion from C$4.3 billion in Q2 2019.
  • Logistics company TFI International’s stock has gained 53 per cent year-to-date.
  • Both these industrial stocks have been sought out by investors this year.

Industrial stocks such as Bombardier Inc (TSX:BBD) and TFI International Inc (TSX:TFII) have been gaining traction in the pandemic-roiled Canadian markets. Once a major manufacturer, Bombardier has now sold off many of its assets including its train division and several aircraft programs. The depreciated stocks are being lapped up by investors hoping the company turns around its fortunes and posts gains on the balance sheet. On the other hand, stocks of supply chain company TFI International have rebounded well after a drop in March, as organizations continue to rely on logistics to reach out to consumers.

Let us take a brief look at both these stocks and their latest financial performances.

Bombardier Inc (TSX:BBD.B)

Current Stock Price: C$0.345

Headquartered in Montréal, Canada, Bombardier Inc caters to two main industrial segments – aviation and transportation. It manufactures transportation solutions ranging from rail equipment to commercial aircraft and business jets. Most of the company’s revenue comes from Europe. The company also operates in North America and Asia Pacific.

BBD.B STOCK PERFORMANCE

Bombardier stocks has seen a sharp decline 82.12 per cent year-to-date (YTD), from C$1.93 at the beginning of the year to the currently price of C$ 0.345. The company has a current market capitalization of C$734 million and profit-to-cash flow (P/CF) ratio of 12. 40 per cent, as per data on the TMX portal. The company offers positive returns on equity (RoE) of 32.53 per cent and negative return on assets (RoA) of 10.09 per cent.

BBD.B FINANCIAL HIGHLIGHTS

Bombardier Inc.’s revenues saw a sharp fall in the second quarter of 2020 due to the impact of the pandemic. The top line stood at US$2.7 billion in the latest quarter, down 37 per cent year-over-year (YoY) from US$4.3 billion in Q2 2019.

Consolidated earnings for Q2 2020 was also lower year-over-year due to direct disruption costs of approximately US$75 million because of the global pandemic crisis. Cash flows from operating activities for the quarter were down 231 per cent YoY to minus -US$957 million. Cash on hand and liquidity as of June 30, 2020 were approximately US$1.7 billion and US$2.5 billion, respectively. The free cash flows impacted by the pandemic is estimated to be US$700 million to US$900 million.

Going forward, Bombardier will be pure-play business jet company. It announced the launch of its latest business jet portfolio, the Learjet 75 Liberty light jet, on October 6. The jet has both six-seat and eight-seat configuration features.

Hit by the pandemic, Bombardier let go of 2,500 employees. Earlier this year, the company decided to sell its train division to French company Alstom SA for US$350 million as per revised deal terms.

 

TFI International Inc. (TSX:TFII)

Current Stock Price: C$ 63.70

Canada-based TFI International Inc is a transportation and logistics company delivering items across North America. The company earns majority of its revenue from the Canadian market.

This year, TFI International Inc was on an acquisition spree. It recently acquired the dry bulk business of Grammer Logistics, prior to which it acquired CCC Transportation and APPS Transport Group. It also will soon acquire DLS Worldwide.

TFII STOCK PERFORMANCE

TFI International’s stock has gained 45.53 per cent year-to-date. The company has a current market capitalization of C$5.94 billion and earnings-per-share (EPS) currently is C$2.81.

As per data on the TMX portal, TFI International’s profit-to-equity (P/E) ratio is 22.30, the profit-to-book ratio (P/B) is 3.135 and the profit-to-cash flow (P/CF) ratio is 7.80. It offers positive returns on equity (RoE) and return on assets (RoA) at 19.15 per cent and 6.94 per cent, respectively. It holds a current dividend yield of 1.633 per cent.

TFII FINANCIAL HIGHLIGHTS

TFI International’s total revenue was C$1.11 billion in the second quarter 2020 (ending June 30, 2020), down 17 per cent YoY. The net income stood at C$69.7 million, as compared to C$87.7 million in the same quarter a year ago.

The total assets of the company as of year-ending June 30, 2020 is C$4.56 million, as compared to C$4.57 million in 2019. The total liabilities stood at C$ 2.66 million in June 2020, as compared to C$ 3.10 million in 2019. The company declared a quarterly dividend pay-out of C$0.26. TFI International will announce third quarter financial results on October 22, 2020.


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