Value Investors: 1 Infrastructure Stock to Own for 10 Years

Badger Daylighting Ltd. (TSX:BAD) is North America’s largest provider of non-destructive excavating services.

| More on:

Badger Daylighting (TSX:BAD) is North America’s largest provider of non-destructive excavating services. Badger works for contractors and facility owners in a broad range of infrastructure industries. These market segments consist primarily of infrastructure projects in areas such as energy generation, electricity and natural gas transmission networks, roads and highways, telecommunications, water and sewage treatment, and general municipal infrastructure.

Customers in these segments typically operate near high concentrations of underground power, communication, water, gas and sewer lines, particularly in large urban centres, where safety and economic risks are high and therefore non-destructive excavation provides a safe alternative for certain customer excavation requirements.

Valuable technology

The company’s key technology is the Badger Hydrovac, which is used primarily for safe excavation around critical infrastructure and in congested underground conditions. The Badger Hydrovac uses a pressurized water stream to liquefy the soil cover, which is then removed with a powerful vacuum system and deposited into a storage tank.

Badger manufactures and designs the company’s truck-mounted hydrovac units, giving Badger the opportunity to incorporate feedback from hydrovac operators into the company’s existing and future design and manufacturing processes. Badger’s business model involves the provision of excavating services through two distinct business methods.

Expanding into new geographic areas

For the first method, Badger has established corporate-run operations, whereby it markets and delivers services in local areas directly. For the second method, Badger works with the company’s operating partners in specific geographic markets to provide Badger Hydrovac services to the end user. In this partnership, the company provides certain operational and training expertise, the Badger Hydrovacs, and North American marketing and administration support.

The operating partners deliver the service by operating the equipment and all work is invoiced by the company, with revenues shared with the operating partner based upon a revenue sharing formula. In the earlier phase of growth and development, Badger frequently used operating partners to expand the company’s business into new markets; as such, Badger’s operating partners were an important part of Badger’s operations. However, the company now largely pursues expansion into new geographic areas through the company’s own operations.

Diverse operating locations

Badger has a diverse and expansive network of operating locations throughout both Canada and the United States. The company services over 150 service locations or areas across both Canada and the U.S., with operations in six Canadian provinces and over 40 U.S. states. The extensive branch network is a key differentiator from the company’s competitors.

Competition in the hydrovac market typically consists of smaller hydrovac operators, which may service a specific location or a small operating area. Badger’s scope and scale of the company’s branch network is a key aspect of Badger’s business, providing the company with the ability to service customers across multiple regions while also providing the opportunity to optimize the company’s fleet.

The company has successfully demonstrated the merits of relocating Badger Hydrovacs during the downturn in the oil and gas markets throughout 2015 and 2016 in addition to Badger’s ability to provide large scale emergency response services to customers after natural disasters such as hurricanes or floods. Long-term shareholders of this stock should do well.

Should you invest $1,000 in Brookfield Property Partners right now?

Before you buy stock in Brookfield Property Partners, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Brookfield Property Partners wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $21,345.77!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 24 percentage points since 2013*.

See the Top Stocks * Returns as of 4/21/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Nikhil Kumar has no position in any of the stocks mentioned.

More on Investing

Electricity transmission towers with orange glowing wires against night sky
Dividend Stocks

My Top 2 TSX Stocks to Buy Right Away for Long-Term Income

These two TSX stocks aren't only looking to climb over time, they also offer up strong dividends to boot!

Read more »

woman analyze data
Stock Market

Where I’d Invest $3,500 in the TSX Today

Do you have $3,500 that you wondering how to invest? Here are five diverse TSX stocks to look at adding…

Read more »

analyze data
Dividend Stocks

Invest $25,000 in This Dividend Stock for $985.78 in Annual Passive Income

If you're looking for some passive income to come your way, don't sit around. Invest here instead.

Read more »

A person looks at data on a screen
Dividend Stocks

Where Will Restaurant Brands Stock Be in 5 Years?

Restaurant Brands stock has delivered outsized gains to shareholders over the past decade. Is the TSX stock still a good…

Read more »

Dividend Stocks

1 Magnificent Canadian Stock Down 29% to Buy and Hold Forever

If you're looking for a value stock that's down but not out, this is the Canadian stock to buy.

Read more »

how to save money
Investing

The Top Telecom Value Stock to Buy With $4,500 Right Now

Here's why Telus (TSX:T) stands out as a top Canadian value stock worth buying with the next $4,500 in this…

Read more »

Canada national flag waving in wind on clear day
Dividend Stocks

The Best Canadian Stocks to Buy in May 2025

These dividend stocks were just bumped up by analysts, making them great buys on the TSX today.

Read more »

ways to boost income
Investing

I’d Put My Entire TFSA Into This Single 5.86% Dividend Giant

Consider adding this Canadian energy dividend stock to your self-directed TFSA portfolio for its massive and reliable dividends for the…

Read more »