Canadian companies that operate and maintain the country’s infrastructure systems are winning investments this year. Badger Infrastructure Solutions (TSX: BDGI), SNC-Lavalin Group (TSX: ATRL), and WSP Global (TSX: WSP) have market-beating returns in 2023 and are likely to deliver outsized gains next year and beyond.
Sustained customer demand
Badger Infrastructure Solutions displays stability and continues to outperform the broader market in 2023. If you invest today, the share price is $40.89 (+56.04% year to date), and you can partake in the 1.69% dividend.
The $1.41 billion company provides non-destructive excavating and related services in North America. Its client base is not only in infrastructure but extends to several industry segments, including construction, industrial, telecommunications, and transportation.
Badger’s competitive advantage is that long-term economic disruption will not hurt its services or the ability to provide them. The company firmly believes there will be long-term sustained customer demand for non-destructive excavation and related services from a broad range of end-use markets.
Strong long-term value creation
SNC-Lavalin (legal name) is on a roll in 2023, evidenced by its 73.97% year-to-date gain ($41.42 per share). The $7.27 billion professional services and project management company operates in key strategic sectors. Its goal is to transform the world’s infrastructure and energy systems.
In the third quarter (Q3) of 2023, revenues increased 16.4% to $2.2 billion versus Q3 2022, while net income from continuing operations jumped nearly 135% year over year to $105 million. The backlog in Engineering Services at the quarter’s end was a record $5.1 billion, while the Nuclear backlog rose 22.6% to $1.1 billion from a year ago.
“Strength across our Services business this quarter was primarily driven by the consistent demand for our capabilities, as public entities focus on and invest in energy security and transition,” said Ian L. Edwards, SNC-Lavalin’s president and chief executive officer (CEO).
The company maintains a positive near-term outlook due to the robust performances of its Engineering Services and Nuclear segments. Also, note that SNC-Lavalin changed its trading AtkinsRéalis. According to Edwards, the change signals an inflection point for the repositioning of SNC-Lavalin.
Edwards is confident that the fully integrated professional services and project management company is well positioned for long-term sustainable value creation.
Future ready
WSP Global provides engineering and design services in the aerospace, building, construction, energy, environment, healthcare, mining, transportation, water, and infrastructure sectors. The $23.5 billion large-cap stock has been rock steady amid the elevated market volatility.
In the first nine months of 2023, revenues and net earnings climbed 28% and 34.5% year over year to $10.7 billion and $419.4 million. For Q3 2023, the net earnings of $156.2 million were 22.5% higher than in Q3 2022. “We continue to achieve significant organic growth, and our backlog remains at record levels,” said Alexandre L’Heureux, WSP president and CEO.
L’Heureux added that WSP will remain agile in navigating fluid macroeconomic and geopolitical environments. This infrastructure stock trades on the high side ($188.49). Nevertheless, current investors enjoy a 20.76% year-to-date gain on top of the modest 0.8% dividend.
Strong buys
The three infrastructure stocks in focus are buying opportunities this year-end because of their visible growth potential. Any of the stocks would be valuable additions to your stock portfolio.
