Canada’s infrastructure sector is experiencing significant growth, and several Canadian stocks are positioned to benefit from this boom. Among them, Aecon Group (TSX:ARE), TC Energy (TSX:TRP), and Brookfield Infrastructure Partners (TSX:BIP.UN) stand out as leaders in construction, energy infrastructure, and global asset management. These companies not only play crucial roles in Canada’s economic development but also present promising opportunities for long-term investors.
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Aecon stock
Aecon Group, one of Canada’s largest construction and infrastructure development firms, has been busy with projects across the country. The Canadian stock’s most recent earnings report for the third quarter of 2024 showed solid growth, with revenue reaching $1.08 billion, up 2.9% from the same quarter in 2023.
Aecon’s gross profit climbed to $150.8 million from $32.5 million a year earlier thanks to improved performance in its construction segment, particularly in nuclear and utilities operations. However, marketing and administrative expenses rose by $27.1 million, mainly due to higher personnel costs and investments to support expansion. This includes the acquisition of Xtreme, a U.S.-based construction company. Aecon’s backlog stood at $5.98 billion as of Sept. 30, 2024, reflecting a steady stream of projects that should support revenue growth well into 2025.
The Canadian stock’s future looks promising as it continues to expand its operations both within Canada and internationally. Aecon recently secured several major contracts, including infrastructure projects related to clean energy and public transportation. The Canadian stock’s commitment to sustainable construction practices has positioned it well to benefit from federal and provincial initiatives focused on green infrastructure. Investors are looking forward to Aecon’s fourth-quarter and full-year 2024 results, set to be released on Mar. 5, 2025, to see if the company can maintain its upward trajectory and capitalize on its expanding project pipeline.
TRP stock
TC Energy, known for its extensive pipeline network and energy infrastructure, remains a key player in Canada’s infrastructure landscape. The Canadian stock reported revenue of $13.77 billion for the trailing twelve months ending Dec. 31, 2024, with a profit margin of 34.12% and an operating margin of 40.48%.
TC Energy has been actively expanding its natural gas infrastructure while investing in renewable energy projects, positioning itself for long-term growth amid the global energy transition. The Canadian stock’s recent initiatives include expanding its Canadian and U.S. pipeline networks and enhancing its energy storage capabilities. These are crucial for integrating renewable energy sources into the grid.
While TC Energy’s forward outlook remains strong, the Canadian stock faces challenges related to its high debt levels, which stood at $60.02 billion as of the most recent quarter. However, its stable cash flow, supported by long-term contracts and regulated assets, helps mitigate these concerns. TC Energy continues to prioritize shareholder returns, offering a forward annual dividend yield of 5.38% with a recent quarterly dividend of $0.85 per share.
Brookfield Infrastructure
Brookfield Infrastructure rounds out the trio with its diversified portfolio of infrastructure assets across the globe. The Canadian stock reported an annual revenue of $21.04 billion for 2024. A 9.5% increase year over year, driven by strong performance in its utilities, transport, and data infrastructure segments.
Brookfield’s funds from operations (FFO), a key measure of cash flow for infrastructure companies, reached $1.9 billion for the year, reflecting a stable income stream from its diversified investments. The Canadian stock also announced its 16th consecutive annual distribution increase, reinforcing its commitment to shareholder returns.
Brookfield’s strategy of acquiring high-quality infrastructure assets with stable cash flows continues to pay off. In 2024, the company expanded its investments in data centres, renewable energy projects, and utility assets across North America, Europe, and emerging markets. While net income decreased to $57 million, primarily due to non-cash items and higher interest expenses, Brookfield’s underlying business remains strong. The Canadian stock’s forward annual dividend yield of 5.29% further enhances its appeal for income-focused investors.
Bottom line
Looking ahead, all three Canadian stocks should benefit from Canada’s infrastructure boom. Aecon’s growing backlog and expansion into sustainable construction projects should drive continued revenue growth. TC Energy’s focus on natural gas and renewable energy infrastructure aligns with the global push for cleaner energy solutions. Brookfield Infrastructure’s diversified portfolio and disciplined investment approach provide resilience in an ever-changing market. So, certainly consider them as the sector moves higher.
