Finning International’s Governance Excellence and Operational Surge Create a Compelling Buying Opportunity

Finning International (TSX: FTT) has emerged as a paragon of corporate governance and operational discipline, with near-unanimous shareholder support for its leadership and strategic execution. Amidst economic uncertainty, the company’s record equipment backlog, disciplined capital allocation, and boardroom cohesion position it as a resilient growth vehicle. Contrast this with peers like Goodfellow Inc., where governance cracks have emerged, and Finning’s advantages become clear. Let’s dissect the data driving this investment thesis.

Governance Strength: A Board Backed by Shareholders

Finning’s governance credibility is underscored by its 2024 Annual General Meeting (AGM), where directors secured overwhelmingly high approval rates. Take the case of Andrés Kuhlmann, CEO of Transelec and a Finning director since 2024, who garnered 99.92% approval—just 81,282 votes against his re-election. This near-unanimity reflects trust in his expertise and the board’s broader strategy.

Compare this with Goodfellow Inc., where directors David A. Goodfellow and G. Douglas Goodfellow each received 2.63% dissenting votes at their AGM—a stark contrast to Finning’s minimal opposition. Even Finning’s most debated nominees, like Harold N. Kvisle (5.40% against), still secured strong majorities, while critical governance decisions—such as executive pay and auditor appointments—were unanimously approved by shareholders.

Operational Momentum: A Record Backlog and Strategic Divestitures

Finning’s governance strength translates directly into execution. The company reported a record $2.8 billion equipment backlog as of March 2025, a 9% jump from year-end 2024. This surge is fueled by 38 ultra-class mining trucks in Canada and 64 in South America, signaling robust demand from mining giants and infrastructure projects. CEO Kevin Parkes noted this backlog positions Finning to deliver “improved earnings capacity” in 2025, with free cash flow jumping to $135 million in Q1—up sharply from $210M net cash use in Q1 2024.

The strategic divestiture of non-core assets like 4Refuel and ComTech further bolsters this thesis. These moves, totaling up to $490 million, free capital for high-margin opportunities in product support and used equipment sales—areas where Finning’s backlog-driven model shines.

Why This Matters in an Uncertain Market

In a world of macroeconomic headwinds—trade tariffs, labor shortages, and fluctuating commodity prices—Finning’s focus on its core Caterpillar dealership business is a defensive advantage. Its backlog growth and inventory management (increased in Q1 to meet demand) ensure revenue visibility, while the $0.275/quarter dividend and share buybacks (5.6% of float in 2024) reward shareholders.

Meanwhile, peers like Goodfellow, with governance fissures and less backlog diversity, face higher execution risk. Finning’s governance strength and operational resilience make it uniquely positioned to capitalize on mining and infrastructure tailwinds.

Investment Catalysts to Watch

• Backlog Conversion: Track Q2 2025 revenue growth as the $2.8B backlog is fulfilled.
• Dividend Growth: A potential 10% dividend hike is on the table post-asset sales.
• ROIC Expansion: Adjusted Return on Invested Capital hit 17.6% in Q4 2024—look for further gains as capital is redeployed.

Conclusion: A Governance-Backed Growth Engine

Finning International’s combination of boardroom cohesion, record operational metrics, and disciplined capital allocation creates a compelling investment case. With shareholder trust near absolute and execution proving resilient, FTT is primed to outperform in 2025. For investors seeking stability amid volatility, this is a rare opportunity to buy a governance-led industrial powerhouse at a strategic inflection point.

Act now—before the market fully prices in Finning’s momentum.