If you’ve never heard of Stella-Jones (TSX: SJ), you’re not alone. But that might be about to change. This quiet Canadian stock has built a powerful business that keeps humming along, churning out profit, cash flow, and shareholder returns, all without much fanfare. So, if you’re looking for something to tuck away for the long haul, this might just be your no-drama winner.
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About SJ
Stella-Jones makes the things you don’t think about, like utility poles, railway ties, and pressure-treated wood, but cities and industries can’t function without them. That makes its business boring in the best way. Infrastructure demand doesn’t vanish in a downturn. That’s exactly why this Canadian stock has held its own in a choppy market.
Let’s talk results. In the second quarter of 2025, Stella-Jones pulled in over $1 billion in sales, with net income hitting $106 million, or $1.91 per share. Sure, revenue dipped 1% from the same period last year, but that was coming off a high base. Earnings before interest, taxes, depreciation, and amortization (EBITDA) came in at $189 million with a margin of 18.3%, only slightly down from the previous year’s 19.1%. So, this business remains a cash-generating machine, even as volumes for railway ties and utility poles came under pressure.
Over the past year, the stock has slipped around 14%, falling from its 52-week high of $94 to about $77. That’s not a collapse, and it actually makes the current entry point more attractive for long-term investors — especially when you consider that earnings per share (EPS) for the first six months of 2025 hit $3.58, up from $3.30 last year. That kind of underlying strength often precedes a comeback.
More to come
The Canadian stock has been busy reinvesting, too. In May, it acquired Locweld, a steel transmission structure manufacturer, for $58 million. That move gives it a new leg in the infrastructure world with steel towers for power grids. With governments spending billions to modernize utilities, this could be a smart expansion. It fits right into Stella-Jones’s strategy of being everywhere infrastructure needs to be.
Even as it invests, it’s returning cash. The Canadian stock returned $54 million to shareholders last quarter through dividends and buybacks and has already hit $417 million out of a $500 million capital return goal. It currently yields around 1.5%, with a payout ratio under 20%. That’s not a huge yield, but it’s extremely well-covered, with room for increases as cash flow grows. At writing, a $7,000 investment could still bring in $111 each year!
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| SJ | $77.21 | 90 | $1.24 | $111.60 | Quarterly | $6,948.90 |
Considerations
Debt is under control, with net debt-to-EBITDA sitting at 2.4 times. That leaves room for more acquisitions or buybacks without stressing the balance sheet. And liquidity remains high, with $693 million available to support operations and growth — not bad for a company many Canadian investors have never taken the time to look into.
As for outlook, Stella-Jones trimmed its full-year revenue forecast slightly to $3.5 billion from $3.6 billion, citing slower sales of utility poles and railway ties. But the important part is that it reaffirmed its target for EBITDA margins above 17%. That’s where the money is made, and where this Canadian stock proves it knows how to stay profitable through cycles.
Bottom line
If you’re hoping to find the next moonshot stock, this isn’t it. Stella-Jones doesn’t make bold promises. It builds things. It owns its niche, and it keeps stacking cash, one treated pole at a time. That’s what makes it one of the best Canadian stocks you’ve probably never heard of. It’s not flashy, but it works. For investors who like sleeping well at night, that can be the best pick of all.
