Buy 4,650 Shares of This Stock for $2,000 in Dividends Every Year

Canadian investors can pursue, growth, value, and $2,000 in annual dividends by grabbing shares of Bird Construction Inc. (TSX:BDT).

Ambrose O'Callaghan

Ambrose O'Callaghan graduated with a BA in Political Science from McMaster University. After that, he jumped into the banking world. He worked from the front line to an investment associate role. After that, he found a way to marry his experience and knowledge in the world of banking and finance to his love and passion for writing. Ambrose is a passionate believer in Warren Buffett's value investing model.

Published August 28, 2023 1:15 pm EDT

Bird Construction (TSX: BDT) is a Mississauga-based company that provides construction services across Canada. In this article, I want to discuss why I’m looking to snatch up this monthly dividend stock in the final days of August. I want to explore how many shares we will need to gobble up $2,000 in annual income. Moreover, we will look at the broader construction industry in Canada. Let’s jump in.

Here’s why Canadians should be eager to own this construction stock in the 2020s

Canada is set to see immigration reach roughly 500,000 each year from 2023 through to 2025. If history is any indication, rates are unlikely to experience a significant dip going forward. That population injection will put pressure on Canadian policymakers and city planners. There is already an increased strain on infrastructure in major metropolitan areas like the Greater Toronto Area. Moreover, Canadian real estate supply has failed to keep up with enormous demand.

These are factors that bode well for the construction industry in the years ahead. ResearchAndMarkets recently projected that the Canadian construction industry was geared up for strong growth in the quarters to come. A 2023 report estimated that the market would deliver a compound annual growth rate (CAGR) of 3.8% from 2023 through to 2027. It predicts that the construction output in Canada will reach $222 billion by the end of this forecast period.

How has Bird Construction performed over the past year?

Shares of this dividend stock have shot up 18% month over month as of close on Friday, August 25. The stock has now climbed 34% so far in 2023. Moreover, its shares have now surged 59% in the year-over-year period. Investors can see more of its recent and past performances with the interactive price chart below.

Should investors be happy with the company’s recent earnings?

This company released its second-quarter (Q2) fiscal 2023 earnings on August 9. Indeed, the earnings sparked the surge in Bird Construction stock that has catapulted it to heights not seen since the middle of the 2010s.

Bird Construction reported construction revenue of $686 million in Q2 2023 — up 19% compared to the $576 it posted in the previous year. Meanwhile, it reported adjusted net earnings of $15.7 million, or $0.29 in adjusted earnings per share (EPS), compared to $8.5 million or $0.16 in Q2 2022. EBITDA stands for earnings before interest, taxes, depreciation, and amortization, aiming to get a clearer picture of a company’s profitability. Bird Construction delivered adjusted EBITDA of $29.5 million in Q2 2023 — up from $21.5 million in the prior year.

Better yet, shares of this monthly dividend stock currently possess a favourable price-to-earnings (P/E) ratio of 12. That means investors chasing income will get a stock that is delivering strong growth and offers great value. This is worth getting excited about.

This stock can power big annual income in 2023 and beyond

In its Q2 report, Bird Construction announced a monthly dividend of $0.036 per share. That represents a 3.9% yield. The stock closed at $10.86 per share on Friday, August 25. For our hypothetical, we can snatch up 4,650 shares of this dividend stock for a purchase price of $50,499. This will allow us to generate monthly passive income of $167.40, which works out to an annual income payout of $2,008.80.