1 Market-Beating, Dividend-Paying TSX Stock That’s a Steal Right Now

An outperforming stock with strong upside potential and long growth runway is the best buy on the TSX today.

| More on:
man touches brain to show a good idea

Source: Getty Images

Are you looking to buy the best TSX today? If yes, now is the time to take a position in Bird Construction (TSX:BDT). This industrial stock has had an incredible bull run (+222.4%) in the last 12 months and is up 85.4% year to date. The current share price of $26.34 is a steal, considering its growth potential from several projects and new contract wins.

The $1.43 billion construction company operates in Canada’s major markets. It offers construction services to nearly all real estate markets such as new construction, industrial maintenance, repair and operations services. Allied services include heavy civil construction, mine support services, and vertical infrastructure. 

TSX 30 candidate

Bird Construction was established 104 years ago and has wings to fly higher in the next century. The top and bottom lines have been increasing every year since 2020. It also rewarded investors with an overall return of 241.83% in 3.01 years. BDT has a strong chance of making it to the 2024 TSX30 List, a flagship program for Canada’s top-performing growth stocks.

Had you invested $6,500 on year-end 2023, your money would be $12,048.56 today. Because Bird also pays a modest 2.2% dividend, the total return bumps slightly with the additional $143 in dividend payments. Market analysts covering the stock projects a $30 high price target in 12 months (+13.9%).

Financial performance

Bird’s financial performance to the start of 2024 is short of remarkable. In the first quarter (Q1) of 2024, construction revenue increased 28.3% to $688.2 million compared to Q1 2023, while net income jumped 94% year over year to $10 million. Its president and chief executive officer (CEO), Teri McKibbon, said the quarterly results point to significant earnings and cash flow improvements this year.

McKibbon added the combined backlog (contracted and awarded work) is growing along with favourable embedded margins. He noted that the acquisition of NorCan Electric was a major factor. Alberta’s leading electrical service provider boosted Bird’s capabilities, capacity, and recurring revenue.

As of March 31, 2024, the backlog level was at a record $3.5 billion, while the pending backlog of work awarded but not yet contracted was $3.4 billion. Cash flow from operations rose nearly 77% to $31.2 million versus the same quarter last year. Bird’s gross profit percentage improved from 7.4% to 8% during the quarter.

Contract awards and projects

On June 18, 2024, Bird Construction announced securing contracts worth over $625 million. These five new projects include mine infrastructure work in Eastern Canada and several long-term care and institutional projects in Western Canada.

The infrastructure project in the east will enhance mining operations, while the west can expect increased long-term care capacity and sustainable, energy-efficient buildings.

According to McKibbon, the latest contract awards underscore Bird’s expertise and indicate strong demand across its target sectors. More importantly, the projects will keep the top-tier construction firm busy for years.

Strategic focus and objective

McKibbon is confident that a strong balance sheet will enable Bird to invest in profitable organic growth and chase attractive acquisitions in today’s active market. “The company’s strategic focus on being a leading collaborative construction company continues to drive growth and better outcomes for all parties,” he said.

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 Christopher Liew has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Dividend Stocks

bulb idea thinking
Dividend Stocks

5 No-Brainer Dividend Stocks to Buy Right Now for Less Than $1,000

These TSX stocks consistently pay and increase their dividends regardless of market conditions, making them no-brainer investments.

Read more »

Canadian Dollars bills
Dividend Stocks

Invest $15,000 in This Dividend Stock for $797 in Passive Income

Bank of Nova Scotia stock is a good idea for placing long-term capital and earning passive income, especially on pullbacks.

Read more »

a man relaxes with his feet on a pile of books
Dividend Stocks

Is Fairfax Financial Stock a Buy for its 1.1% Dividend Yield?

Is Fairfax worth adding to your portfolio?

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

How to Use Your TFSA to Earn $5,000 Per Year in Tax-Free Income

Adding these two top dividend stocks could help you create a reliable income-generating portfolio within your TFSA.

Read more »

woman looks out at horizon
Dividend Stocks

Is Manulife Stock a Buy, Sell, or Hold for 2025?

Manulife stock (TSX:MFC) has had one heck of a year. But is that set to continue in 2025 and beyond?

Read more »

Canadian dollars in a magnifying glass
Dividend Stocks

Retirees: Expect a 2.7% CPP Inflation Boost Next Year

A 2.7% inflation bump means more nominal income. Investing in ETFs like the BMO Canadian Dividend ETF (TSX:ZDV) provides a…

Read more »

up arrow on wooden blocks
Dividend Stocks

3 Blue-Chip Dividend Stocks Every Canadian Should Own

These are large-cap TSX stocks with fundamentally strong businesses and growing earnings bases that support their distributions.

Read more »

Dividend Stocks

Is Granite REIT stock a buy for its 4.3% dividend yield?

Granite REIT stock appears to be a good buy for monthly income and long-term price appreciation at current levels.

Read more »