5 TSX Industrial stocks to watch after latest GDP data

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 5 TSX Industrial stocks to watch after latest GDP data
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  • CAE's operating income in Q3 2022 was noted at C$ 102.1 million.
  • In Q3 2022, GFL Environmental boasted a revenue of C$ 1,831.2 million.
  • Toromont Industries' net earnings were C$ 123.1 million in Q3 2022.

Amid changing conditions, the performance of Canada's industrial sector comprising manufacturing, equipment, construction supplies, etc., is witnessing a change.

Currently, the S&P/TSX Industrials Index accounts for 13.31 per cent of the total market. However, with the weakening of inflation, the sector jumped by 12.082 per cent QTD (quarter-to-date).

According to the Statistics Canada report, in the third quarter, Canada's real GDP (gross domestic product) increased by 0.7 per cent and exports by 2.1 per cent. An increasing industrial sector contributes to increased production, employment, and investment.

Further, investment in business non-residential structures and engineering structures rose by 2.8 per cent and 3.3 per cent, respectively.

Amid the increased sector performance, let us look at these five stocks with their recent financial highlights:

  1. GFL Environmental Inc. (TSX: GFL)

GFL Environmental Inc. offers environmental services in liquid waste management, infrastructure, soil remediation, and non-hazardous solid waste management.

In Q3 2022, GFL Environmental's  revenue grew to C$ 1,831.2 million from C$ 1,381.3 in Q3 2021. The company's total comprehensive income was reported with an increase of C$ 162.9 million compared to a loss of C$ 109.8 million for the same period. The adjusted EBITDA soared to C$ 473.3 million from C$ 399.6 million. GFL Environmental's s cash flow from operating activities increased to C$ 286.1 million from C$ 223.9 million for the reported quarter.

As on September 30, 2022, the total assets increased to C$ 20,014.4 million from C$ 18,373.7 million on December 31, 2021. Meanwhile, the liabilities increased to C$ 13,692.8 million from C$ 12,597.6 for the same comparable period.

The company authorized a quarterly dividend of US$ 0.012 with a dividend yield of 0.173 per cent.

  1. TFI International Inc. (TSX: TFII)

TFI International Inc. is a Canada-based logistics and transportation company. It is organized under four segments- logistics, truckload, package and courier, and less-than-truckload.

TFI International's total revenue in Q3 2022 was reported at US$ 2,242 million compared to US$ 2,094 million in Q3 2021. The adjusted EBITDA rose to US$ 348.2 million for the same period from US$ 296.4 million. The company's operating income increased to US$ 318.4 million from US$ 191.6 million for the reported quarter. The net cash from operating activities was noted at US$ 337.8 million versus US$ 211.2 million. TFI International's net income grew to US$ 245.2 million from US$ 131.6 million. The company's EPS is reported at US$ 10.5, and it announced a quarterly dividend per share of US$ 0.35 to its shareholders.

Diluted EPS (earnings per share) of TFI International in two different quarters:

  1. CAE Inc. (TSX: CAE)

CAE Inc. caters to healthcare markets and delivers civil-aviation training, security, and defense. The company sells multiple types of synthetic exercises and simulators as alternatives for live-training experiences.

In Q3 2022, CAE's revenue grew to C$ 993.2 million from C$ 814.9 million in Q3 2021. The operating income witnessed a 160 per cent change and rose to C$ 102.1 million from C$ 39.2 million for the same comparative period. The company's net income increased to C$ 46.3 million from C$ 17.2 million.

CAE's adjusted EPS was reported at C$ 0.19 versus C$ 0.17. The free cash flow soared to C$ 108.4 million compared to C$ 19.4 million. Meanwhile, the net debt increased to C$ 3,194.6 million from C$ 2,700.1 million. The company's gross profit was noted at C$ 273.6 million compared to C$ 227.6 million for the reported quarter.

  1. Toromont Industries Ltd. (TSX: TIH)

Toromont Industries Ltd. is a Canadian industrial company with two business segments-CIMCO and Equipment Group.

Toromont Industries' net earnings in Q3 2022 were posted at C$ 123.1 million compared to C$ 93.8 million in Q3 2021. The company's revenue increased to C$1,139.6 million from C$ 997.2 million for the same comparative period. The basic EPS rose to C$ 1.5 from C$ 1.13. Toromont Industries' operating income jumped to C$ 169.1 million from C$ 134.4 million for the reported quarter. The company's total capitalization rose to C$ 2,080.82 million from C$ 1,682.83 million.

The company distributed a quarterly dividend of C$ 0.39 per share and reported its five-year dividend growth at 14.17 per cent. Toromont's EPS is C$ 4.85.

  1. Ritchie Bros. Auctioneers Incorporated (TSX: RBA)

Ritchie Bros. Auctioneers operates in the heavy equipment sector. Initially, the company operated as a live auctioneer of industrial equipment. It has expanded into equipment in transportation, construction sale, oilfield, and agriculture.

In Q3 2022, Ritchie Bros.' adjusted EBITDA grew to US$ 102.54 million from US$ 91.24 million in Q3 2021. The company's revenue rose to US$ 411.47 million from US$ 329.68 million for the same comparable period. The net income increased to US$ 42.92 million from US$ 32.35 million. Meanwhile, the adjusted EBITDA soared to US$ 102.54 million from US$ 91.24 million for the reported quarter.

As on September 30, 2022, the cash and cash equivalents rose to US$ 438.77 million from US$ 326.11 million on December 31, 2021. With a quarterly dividend of US$ 0.27, the company reported its three-year dividend growth at 9.41 per cent. 

On November 7, 2022, Ritchie Bros. announced its acquisition of IAA, Inc.

Bottom Line

Stock selection requires proper research and analysis of the market and the governing factors. Some factors may work subtly yet lead to a major change in the market. Keep an eye on every aspect and diligently assess every detail. Your portfolio reflects your investment goals, which should align with your current stocks.

Have a long-term strategy to breeze through any fluctuations and uncertainties coming your way. Also, check the company valuations and past and present market performances along with the stock performance.

Please note, the above content constitutes a very preliminary observation based on the industry and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.


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