Riding New Flyer To The Bank

Summary

  • New Flyer is well positioned within the North American transit market and continues to invest in its technology platforms.
  • The company has a rather large back order, strong customer base and solid performance track record.
  • The companies and their dividends meet my investing guidelines & a review of what the street has to say about New Flyer.

For those who are familiar with my investments will conclude that I am a strong believer and supporter in the Canadian banking system. The Canadian banks offer dividend investors an excellent investment opportunity because they have a strong track record of delivering dividends while increasing them over time. Outside of the dividends they offer very little risk to investors as they are resilient to economic failure which was demonstrated during the financial crisis of 2008. However, as an investor I seek out qualify companies which meet the same criteria as the Canadian banks, which is: leadership position in their industry, strong balance sheet, annual dividend yielding over 4%, track record of increasing dividends, moderate Price to Earnings Ratio and limited fluctuation in the stock price.

For those who are unfamiliar with New Flyer Industries (OTC:NFYEF), they are a Canadian based manufacturer of heavy-duty transit buses in North America. The company is a technology leader in the space and offers drive systems powered by: clean diesel, natural gas, diesel-electric hybrid, electric trolley and now, battery-electric. Further, New Flyer also operates the industry’s most sophisticated aftermarket parts organization, sourcing parts from hundreds of different suppliers and providing support for all types of transit buses.

Personally, I view this as an exciting niche market space as public transportation will only continue to grow for various reason including: environmental benefits, a shift to urbanization which will drive demand for mass transit and the cost effectiveness over other forms of mass transportation. The business itself is rather bullet proof; during times of economy uncertainty the North American federal governments are dumping capital into municipal projects including transportation. During times of economic expansion governments continue to invest heavily in mass transportation because it is a good political platform which has a positive effect on local communities. Essentially, mass transits is a feel good story with the bus market being the most practical and easy to deploy in scale.

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