1 Canadian Dividend Stock Quietly Crushing the TSX Today

BBU (TSX:BBU.UN) stock has seen shares climb a whopping 71% since October, but there’s more room to run according to its outlook.

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There are headline makers that we see a lot on the TSX today. Companies that we’re all familiar with and see discussed over and over again. But what about the other ones — those that are climbing higher and higher without the recognition?

Once such stock is Brookfield Business Partners (TSX:BBU.UN). This company has been quietly crushing it on the TSX today, with shares up a whopping 71% since hitting 52-week lows. So, what’s been going on with this stock, and do investors have it right?

Recent earnings

BBU stock recently reported earnings that were quite strong for 2023. The company saw net income increase significantly year over year to $1.4 billion from just $98 million the year before! BBU stock said this was from a strong business performance as well as capital-recycling initiatives, with all three operating segments increasing.

Business grew the most, reaching $900 million in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), with improvements in performance and acquisitions. Industrials remained stable, with adjusted EBITDA at $855 million. Only infrastructure saw a slight dip to $853 million due to the sale of its nuclear technology business.

Even so, the company made some strategic moves that set it up for success. This included a leadership change, selling of real estate, and even share repurchases. All of this showed confidence in the company.

More on strategy

One big change investors noted was the new chief executive officer Anuj Ranjan, as well as Cyrus Madon placed in the executive chair position. This move was to give BBU stock a renewed focus on strategic growth as well as value creation.

This leadership team, in particular, brings extensive experience in acquisitions, operations, and capital allocation, which should help lead to more strategic advancements.

Meanwhile, that strategy in the past has included the sale of non-core assets to unlock capital for other investments. What’s more, these acquisitions offer long-term growth potential, helping to diversify the company’s portfolio and enhance long-term returns.

Showing confidence

Yet BBU stock may be making changes, but don’t let that make you think the company isn’t confident in its operations. In fact, quite the opposite. BBU stock’s strong financial performance even in 2023 points to even more growth in 2024. Its capital recycling, in particular, created $2 billion in capital.

What’s more, BBU stock has been buying back shares, believing there is even more value coming as the stock hits 52-week highs. Analysts tend to agree, believing the stock is a “Buy” even at these levels. And while that might be at 52-week highs, on the metrics side, it looks cheap!

BBU stock currently holds a 1.18% dividend yield to consider, trading at an ultra-low 3.29 times earnings. Furthermore, value can be found with a price-to-book value ratio of just 0.83 and price-to-sales ratio at 0.03! And while that dividend looks low, it’s still far higher than the average of 0.93% over the last five years.

So, the bottom line here is that not only is BBU stock killing it, but it looks like it will continue to kill it in 2024. The company has a lot lined up, including cash for acquisitions. So, I would certainly jump on the back of this bandwagon for a smooth ride.

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.

The Motley Fool does not hold positions in any of the stocks mentioned. The Motley Fool has a disclosure policyFool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned.

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