Whereas no person likes market pullbacksthey have a tendency to present long-term buyers their greatest alternatives. Generally, a essentially sturdy inventory slips just because the general trade goes by means of a gradual patch. That doesn’t at all times imply the enterprise itself is damaged.
For affected person Silly buyersthat hole between worth and efficiency generally is a actual alternative. The trick is to concentrate on firms with sturdy steadiness sheets, skilled administration groups, and a historical past of producing regular money circulate in each good instances and unhealthy.
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% during the last yr. But the corporate continues to provide strong free money circulate, develop its dividend, and broaden its operations. However is that this Canadian inventory price contemplating on this pullback? Let’s discover out.
TFI Worldwide inventory
Should you don’t realize it already, TFI Worldwide is a Canadian transportation and logistics agency working throughout Canada, america, and Mexico. This Saint-Laurent-based agency runs three most important 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 presently additionally gives 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 circulate typically tells a extra essential story. And that was the encouraging half within the firm’s newest earnings report as its free money circulate got here in at US$199.4 million for the quarter. Even in a weaker freight surroundings, producing almost US$200 million in free money circulate says quite a bit about how effectively TFI’s enterprise is run.
Even amid the continued challenges, the corporate is continuous to regulate operations to guard margins and place itself for the subsequent 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 accepted a 4% enhance within the quarterly dividend to US$0.47 per share. Growing the dividend throughout a cyclical slowdown exhibits TFI’s confidence in its long-term cash-generating means.
And we shouldn’t overlook the truth that, regardless of the current weak spot, TFI inventory has climbed greater than 750% during the last 10 years.
Why it may preserve compounding
Transportation is a cyclical trade. Freight demand rises and falls with the financial system. Nevertheless it by no means disappears. Items nonetheless want to maneuver throughout North America, provide chains proceed to evolve, and corporations rely closely on environment friendly logistics companions.
TFI’s broad platform and geographic attain assist it handle by means of 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 opponents are struggling. That’s one of many key explanation why I imagine TFI inventory nonetheless has massive upside potential for long-term buyers.