Is a 100% return from the TSX possible within a year? The premise is incredible, but the answer can sometimes be yes! If you’re investing today, consider buying two stocks that have delivered outsized gains in less than a year: Bird Construction (TSX: BDT) and Propel Holdings (TSX: PRL), which are my favourite stocks for October.
The growth stocks have market-beating returns of 112% and 165%, respectively, so far, compared with the broader market’s 18% year-to-date gain. A $5,000 investment at the end of 2023 would have more than doubled your money. And neither stock shows any sign of slowing down.
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“One Bird” growth strategy
Bird Construction is a “strong buy” following its inclusion in the 2024 TSX30 List. The industrial stock ranked seventh in the annual rankings of the 30 top-performing Canadian stocks. Also, at $29.97 per share, BDT pays a 2.79% dividend. On October 9, 2024, the board approved a 50% dividend increase due to significant business growth.
The $1.67 billion company provides construction services to commercial, institutional, retail, multi-tenant residential, and industrial clients. In addition, it caters to the civil, energy, mining, nuclear, renewables, water, and wastewater sectors.
According to its President and CEO, Teri McKibbon, the strategic focus on key sectors drives performance and assures continued growth and margin expansion in 2024 and beyond. The recent awards worth over $625 million include two civil site works, a multi-year master service agreement in the petrochemical sector and a task order in the nuclear sector.
In the first half of 2024, construction revenue and net income rose 27.7% and 66.4% year-over-year to $1.6 billion and $31.4 million. The profit growth in Q2 2024 versus Q2 2023 was 56% to $21.4 million. McKibbon notes that earnings growth outpaces revenue growth. As of June 30, 2024, the total backlog ($3.4 billion) hovers at near-record level.
Also, in June, Bird entered an agreement to acquire Jacob Bros Construction, a privately owned civil infrastructure construction business. The acquisition will enable entry into civil infrastructure construction projects such as airports, bridges, earthworks, energy, rail, seaports, and utilities.
Management said the “One Bird” growth strategy signals a long growth runway ahead. The 2025-2027 strategic plan targets up to 10% revenue compound annual growth rate (CAGR). Furthermore, the strategic expansion into major and new markets should result in a well-balanced revenue mix comprising buildings (37%), industrial (37%), and infrastructure (26%).
High-growth fintech
Propel Holdings is a future TSX30 winner. At $33.26 per share, the trailing one-year price return is 328.90%, while the overall return in three years is 261.35% (53.33% CAGR). Total gains would be higher if you include the 1.65% dividend yield. On August 7, 2024, the board approved an 8% dividend increase.
Through its AI-powered online lending platform, the $1.16 billion financial technology company provides credit solutions to consumers with limited access to credit or, often denied by traditional lenders.
In the first half of 2024, revenue and net income climbed 48% and 85% to US$203.3 million and US$24.2 million from a year ago. Both are record quarterly results.
Screaming buys
Bird Construction and Propel Holdings are screaming buys in Q4 2024. You can be a growth and dividend in one!
