CA - Finning International: Caterpillar Dealer At A 9% Underlying Free Cash Flow Yield

2024-04-11 10:30:00 ET

Summary

• Finning International reported impressive EBIT growth in 2023, with total revenue increasing by almost 14%.
• The company's cash flows remain strong, with adjusted operating cash flow of approximately C$530M and underlying free cash flow of C$4 per share.
• Finning's relationship with Caterpillar is a minimal risk, and the company is trading at an attractive valuation with potential for dividend increases and debt reduction.

Introduction

Finning International ( FTT:CA ) ( FINGF ) is a Canada-based partner for Caterpillar ( CAT ) as it has been the authorized dealer for the US brand for almost 100 years in certain parts of Canada. Right now, Finning Canada is the authorized dealer in the western provinces of Canada (Saskatchewan, Alberta, BC, Yukon Territory, Northwest Territories and portion of Nunavut) but it also has activities abroad:

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