Identifying a solid Canadian stock that you can buy, hold, and feel good about for decades is never an easy achievement, especially when there’s a lot of market volatility all around you. Every once in a while, a company will pop up on your radar. It will show promise of steady growth, rising dividends, and a strong business model in an industry with a solid outlook. Sometimes, a stock like this might be available at a bargain, making it too attractive to ignore.
If you’re bullish about the construction sector and want to invest in a Canadian stock with plenty of upside potential, Bird Construction (TSX:BDT) might just be the holding you’re looking for. It is a magnificent small-cap stock that has quietly made a place for itself in delivering good returns, and right now, it’s on sale.
Bird Construction stock
Bird Construction is a $1.40 billion small-market-cap company headquartered in Ontario, operating as a general contractor in the Canadian construction market. The company’s focus in the general contracting industry is on industrial, commercial, and institutional projects. The company offers construction services for these markets, including new construction, industrial maintenance, repair, and operations services, vertical infrastructure building, electrical, mechanical, specialty trades, heavy civil construction, and contract surface mining.
A small-cap stock, Bird Construction is well-positioned to deliver solid long-term wealth growth to its investors. The company’s civil construction capabilities include site preparation, foundations, and hydroelectric projects. It also makes and renovates healthcare facilities, educational institutions, mixed-use residential developments, and government buildings. Being a jack of all trades has benefited the company over the years, and it has passed them on as returns to its investors.
As of this writing, BDT stock trades for $25.31 per share, down by over 22% from its 52-week high. However, the stock is up by 330.44% from the same point five years ago. The current dip from its all-time high of $32.67 per share gives you the opportunity to invest in its shares at a significantly lower price point and lock in an inflated 3.32% dividend yield.
The company expects its revenue to increase from $3.4 billion last year to $4.71 billion by 2027. It also anticipates its adjusted earnings per share (EPS) to increase from $2.04 to $4 per share by 2027. Analyst expectations also suggest that BDT stock will increase its net income margin by half over this three-year period.
Improving financials will allow the company to fund growing dividends consistently. Presently, its dividends are $0.85 per share but are expected to rise to $1.12 by 2027. The company’s recent quarterly earnings report saw its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increase by a massive 42% year over year.
Foolish takeaway
Bird Construction stock seems to have pretty much everything you might want in a stock to consider adding to your self-directed investment portfolio for the long run. It trades at arguably undervalued share prices and has strong fundamentals, solid growth potential, recurring revenues, and a growing customer base. The company’s management handles operations efficiently to turn the revenue into healthy profit margins.
Overall, I think the construction stock has what it takes for the foundations of an excellent long-term winner to buy and hold in your self-directed portfolio. It might be worth investing in while its share prices lag behind the rest of the market.
