Spring Sale
The 2024 TSX30 winners, the flagship program for the top-performing Canadian growth stocks, are out. Still, some names outside the latest list, like Aecon Group (TSX:ARE), Sylogist (TSX: SYZ), and MDA Space (TSX:MDA), are well-positioned to join the club soon. These growth stocks could double their revenues by 2025.
Robust pipeline
Aecon’s performance thus far in 2024 has been stellar. At $20.78 per share, the year-to-date gain and one-year price return are 64.27% and 97.85%, respectively. An investor’s overall return is higher if you include the 3.66% dividend yield. With a robust pipeline of major projects and a growing backlog, you have a reliable passive-income source.
The $1.3 billion company operates in the engineering and construction services industry. Aecon provides construction and infrastructure development services to the private and public sectors in Canada, the U.S., and internationally. Aecon’s most recent award is the Surrey-Langley SkyTrain project from the province of British Columbia. It has a 33.3% ownership stake in the $928 million contract.
As of June 30, 2024, the backlog was $6.2 billion, while new contract awards in the second quarter (Q2) of 2024 reached $766 million. Its president and chief executive officer (CEO), Jean-Louis Servranckx, said, “Aecon is well-positioned to achieve further revenue growth over the next few years.”
Market leader
Sylogist displays strong showing this year and continues to beat the broader market (+14.31%) and the technology sector (+11.68%) year to date. At $11.36 per share, current investors are up +52.75%. High-growth companies rarely pay dividends, although this tech stock yields a modest 0.35%.
The $265.24 million company provides purpose-built, mission-critical Software-as-a-Service (SaaS) solutions to non-profit organizations and the public sector. It takes pride in the backing of Microsoft, a solutions partner. The comprehensive portfolio enhances the operational efficiency of clients.
In Q2 2024, SaaS annual recurring revenue (ARR) rose 17% to $29.4 million. Bookings and SaaS net revenue retention (NRR) grew 112% and 109% year over year, respectively.
According to Bill Wood, CEO of Sylogist, the quarterly performance aligns with management’s 2024 acceleration plan. He added that the investments in the last two years have positioned Sylogist as a leader in the markets it serves.
Expanding industry
MDA Space, a space mission partner, has a bright outlook in the aerospace and defence industry. As of this writing, the share price is $16.99 (+47.48% year to date). The stock has a long growth runway given the rapidly expanding global space industry, which is expected to grow to US$1.8 trillion in 10 years.
The $2.04 billion satellite manufacturing company is constructing and expanding its satellite production facility (185,000 square feet) in Quebec. Once complete, it would be the world’s largest high-volume manufacturing facility in its satellite class and can produce up to two MDA satellites daily.
In the first half of 2024, revenue and backlog grew 13.37% and 48.4% year over year to $451.1 million and $4.6 billion. Net income increased 6.85% to $23.4 million from a year ago. MDA Space CEO Mike Greenley said the record backlog should translate to more robust operational performance and free cash flow positive.
Profitable options
Aecon Group, Sylogist, and MDA Space are profitable options going into Q4 2024. All three could deliver superior returns next year due to substantial revenue growth.
