After years of struggles that saw the company fall to the brink of bankruptcy and sell off a significant portion of its business, Bombardier Inc. has found itself among the top-performing TSX stocks of the last three years.
The Montreal-based company came in at No. 13 on the 2023 TSX 30 list, a ranking of the top 30 top-performing stocks over a three-year period based on dividend-adjusted share price performance. This marks the first time that Bombardier has appeared on the list, which was first compiled by the Toronto-based exchange in 2019. Over the three-year period, the company’s dividend-adjusted share price is up 522 per cent as of June 30, while its market capitalization jumped 533 per cent.
“Bombardier has shown remarkable resilience in recent years, and this ranking is a testament to its ability to evolve and pivot amid challenging circumstances,” Loui Anastasopoulos, CEO of the Toronto Stock Exchange, said in a news release.
Bombardier today is a different and much smaller company than it was before Eric Martel took over as chief executive in the spring of 2020.
The company was deeply in debt after it sank billions of dollars into the development of the CSeries commercial aircraft program. Bombardier wound up selling the program to Airbus and exiting the commercial aviation industry entirely. In early 2020, Bombardier sold off its train division to Alstom, leaving the company solely focused on its private jet business.
The strategy has so far borne fruit. While the COVID-19 pandemic brought the commercial airline industry to a halt, it was a boon for the private jet market. Martel said in a previous interview with Yahoo Finance Canada that the pandemic was “an accelerator” for the plane maker and marked a turning point for the once beleaguered company.
Bombardier has also focused on paying down debt. The company said in March it had reduced its total debt in the last two years by more than US$4.5 billion, marking a 45 per cent reduction since 2020.
“The company is executing well on its recovery and while demand has come off the boil, it is holding up reasonably well,” J.P. Morgan analyst Seth Seifman said in a research note following Bombardier’s quarterly result release in August.
“The Bombardier balance sheet is in the healthiest state in recent memory and with management remaining on track to meet its longer-term financial targets, balance sheet risk should continue to decline.”
This year's TSX 30 was heavily dominated by the oil and gas sector, which made up 50 per cent of the list. Calgary-based Paramount Resources Ltd. claimed the No. 1 spot, with a share price increase of 1,913 per cent over a three-year period.
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.