Why it’s a Mistake to Ignore These 2 Stocks!

Here are two stocks, including Stantec Inc (TSX:STN)(NYSE:STN), to watch after the elections.

| More on:
woman data analyze

Image source: Getty Images.

Stantec (TSX:STN)(NYSE:STN) is a global engineering and construction firm based out of Edmonton. The company extends consulting services on engineering, design, and geomatics. According to Engineering News-Record, Stantec is ranked 10th best out of 150 global design firms.

As of Q2 2019, Stantec has an order backlog of $4.3 billion and experienced organic revenue growth of 2.3%. It’s always a good sign when a company can grow without having to spend capital on acquisitions. Stantec also pays a consistent dividend of 1.9%.

The company has a global footprint which insulates Stantec from shocks. Stantec’s community design expertise is well positioned in the European Union (E.U.) given the E.U.’s priority on developing a low-carbon, circular economy.

Regardless of which political party wins the Canadian election, there will be spending on energy, whether conventional or renewable. Stantec’s extensive experience with the energy sector positions the company well to receive those contracts.

If the next Canadian government increases spending on infrastructure, Stantec will have a boost in revenues. For example, Stantec extends bridge inspection and maintenance services. It’s not a flashy service but a much-needed one that governments can’t ignore. As recently as August 23, 2019, an under-construction overpass in Québec City collapsed. In April 2019, the government of Saskatchewan instructed four municipalities to put weight restrictions on newly constructed bridges out of concern they would collapse.

There’s an opportunity for investors to ride the swings in price as well as to hold onto the stock for the longer term.

Based out of Calgary, Badger Daylighting (TSX:BAD) extends non-destructive excavation services for buried pipes and cables. The company has a one-year total return of 54.5%, which outperformed the Canadian construction industry, which had a one-year total return of -24.3%.  Badger Daylighting issues dividends of 1.35%.

The company’s stock price has seen steady growth since 2012. In Q2 2019, Badger Daylighting experienced an 11% increase of revenue from its American operations and 7% decline in its Canadian operations compared to Q2 2018. Overall, there was a 9% year-on-year increase of revenues.

The company has a strong footprint across Canada and is growing Badger Daylighting’s presence in the United States. Badger Daylighting is very good at positioning the company’s assets throughout the country to provide fast service. The company owns an extensive fleet of vehicles, enabling Badger Daylighting to win large municipal contracts.

According to the Canadian Urban Transit Association, Canada needs to invest $74.9 billion on urban transit by 2022. Badger Daylighting uses non-destructive excavation means, giving Badger Daylighting a competitive advantage to work in cities. The company’s non-destructive technology causes fewer disruptions for residents and reduces operational costs.

The Canada Infrastructure Bank recently approved $71 million funding for planning of a Via Rail dedicate track project between Toronto and Montréal, a $2 billion expansion of Toronto’s GO Transit rail network, and a $1.28 billion electric-rail project in Montréal. These projects are terrific opportunities for Badger Daylighting given the company’s expansive network of vehicles and expertise with railroads. When track gets laid, the work will be done in tight spaces and high-traffic areas. There will be a need for a light footprint. Badger Daylighting can meet those needs.

Why choose these two companies and not other engineering companies? One obvious political reason is that neither company has been involved in a political scandal. When either of these companies wins a public contract, the public won’t raise concerns about how the contract was awarded.

Both companies have market capitalizations of over $1 billion and can bid on large contracts and service them without issue.

Keep an eye out on these companies, and if the next government puts more money into infrastructure, expect the value of these stocks to increase.

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.ca contributor Renée Gendron has no position in the mentioned stocks.  

More on Investing

Target. Stand out from the crowd
Investing

Prediction: This Canadian Growth Stock Could Double by 2030

Alimentation Couche-Tard (TSX:ATD) is a top growth stock that could do well over the next six or so years.

Read more »

Businessman holding AI cloud
Tech Stocks

Could Investing $20,000 in Nvidia Make You a Millionaire?

Nvidia stock has made investors millionaires in the last 10 years. Is it too late to invest to become a…

Read more »

Engineers walk through a facility.
Dividend Stocks

1 TSX Stock I Wouldn’t Touch With a 10-Foot Pole

AtkinsRéalis (TSX:ATRL) is one TSX stock I'd never invest in.

Read more »

money cash dividends
Stocks for Beginners

Have $500? 3 Absurdly Cheap Stocks Long-Term Investors Should Buy Right Now

If you're looking for cheap stocks, these three have a huge future ahead of them, all while costing far less…

Read more »

edit Woman in skates works on laptop
Dividend Stocks

3 No-Brainer Stocks to Buy Under $30

These three stocks all offer a huge deal for investors looking for dividends, as well as growth that will last.

Read more »

Business man on stock market financial trade indicator background.
Tech Stocks

1 Growth Stock Down 50 Percent to Buy Right Now

There are plenty of growth stocks in the market worth considering, but Shopify (TSX:SHOP) looks like one of the best…

Read more »

You Should Know This
Dividend Stocks

How to Convert a $300 Monthly Investment Into $338 in Monthly Income

If you want a certain amount in monthly passive income, invest a similar amount today and leave the rest to…

Read more »

Increasing yield
Dividend Stocks

3 Income Stocks With Big Yields to Consider in April 2024

If you haven’t yet made your March investments, here are three income stocks to buy the dip and lock in…

Read more »