Whereas no person likes market pullbacks, they have an inclination to offer long-term buyers their finest alternatives. Typically, a essentially robust inventory slips just because the general trade goes via a gradual patch. That doesn’t at all times imply the enterprise itself is damaged.
For affected person Silly buyers, that hole between worth and efficiency generally is a actual alternative. The trick is to deal with firms with robust stability sheets, skilled administration groups, and a historical past of producing regular money circulation in each good instances and dangerous.
That’s the reason TFI Worldwide (TSX:TFII) appears to be like fascinating proper now. Regardless of the broader market rally, TFI inventory has slipped by about 9% over the past 12 months. But the corporate continues to provide stable free money circulation, develop its dividend, and develop its operations. However is that this Canadian inventory value contemplating on this pullback? Let’s discover out.
TFI Worldwide inventory
In case you don’t understand it already, TFI Worldwide is a Canadian transportation and logistics agency working throughout Canada, the US, and Mexico. This Saint-Laurent-based agency runs three foremost enterprise segments: less-than-truckload, truckload, and logistics. It handles every thing from smaller freight shipments to full truckloads, together with brokerage and logistics providers.
On the time of writing, TFI shares commerce at $168.16 apiece, giving the corporate a market cap of $13.8 billion. The inventory at present additionally presents a dividend yield of 1.6%, paid quarterly. The current decline in shares seems to be extra about regular freight cycles than any deeper downside with its enterprise.
A slowdown however not a breakdown
Within the third quarter of 2025, TFI’s whole income fell 10% YoY (year-over-year) to US$1.97 billion. Its working revenue additionally plunged 21% YoY to US$153.3 million.
At first look, these monetary outcomes would possibly look disappointing. However for a transportation firm, money circulation typically tells a extra vital story. And that was the encouraging half within the firm’s newest earnings report as its free money circulation got here in at US$199.4 million for the quarter. Even in a weaker freight setting, producing practically US$200 million in free money circulation says lots about how effectively TFI’s enterprise is run.
Even amid the continuing challenges, the corporate is continuous to regulate operations to guard margins and place itself for the following freight upcycle.
Nonetheless rewarding shareholders
Even with softer freight situations, TFI has not stepped again from rewarding buyers. Within the third quarter alone, the corporate returned US$104.8 million to shareholders, together with US$37.3 million in dividends and US$67.4 million in share repurchases.
It additionally accredited a 4% enhance within the quarterly dividend to US$0.47 per share. Rising the dividend throughout a cyclical slowdown reveals TFI’s confidence in its long-term cash-generating capability.
And we shouldn’t neglect the truth that, regardless of the current weak point, TFI inventory has climbed greater than 750% over the past 10 years.
Why it might maintain compounding
Transportation is a cyclical trade. Freight demand rises and falls with the financial system. But it surely by no means disappears. Items nonetheless want to maneuver throughout North America, provide chains proceed to evolve, and firms rely closely on environment friendly logistics companions.
TFI’s broad platform and geographic attain assist it handle via these ups and downs. Its mixture of asset-heavy and asset-light operations offers it flexibility to regulate capability, management prices, and make acquisitions when rivals are struggling. That’s one of many key the explanation why I imagine TFI inventory nonetheless has large upside potential for long-term buyers.
