The Bank of Canada (BoC) recently kept its benchmark policy rate unchanged at 2.25% at the end of April and signaled caution amid global trade uncertainty, geopolitical tensions, and rising energy prices. While further rate cuts may now take longer than many investors initially expected, Canada’s economy is still projected to grow moderately over the next few years.
And whenever the BoC decides to cut or hold interest rates steady, I immediately start looking for sectors that could benefit from stable rates. That’s because steady rates could support the long-term projects of many businesses while reducing uncertainty around financing and expansion plans.
One TSX-listed stock that looks interesting in the current rate environment is Black Diamond Group (TSX:BDI). This Calgary-based company has rewarded investors with attractive returns lately while continuing to show strong fundamentals and expand across several high-demand industries.
In this article, I’ll explain why Black Diamond stock could be a smart TSX stock to consider after the BoC’s latest rate decision.
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A diversified business with multiple growth drivers
If you don’t know it already, Black Diamond operates through two primary business segments: modular space solutions (MSS) and workforce solutions (WFS).
On the one hand, its MSS business rents modular buildings to customers across industries such as construction, education, industrial operations, government, and financial services. On the other hand, the company’s WFS segment provides workforce accommodation services, including turnkey camp operations and catering solutions.
In addition, Black Diamond also owns LodgeLink, a digital business-to-business marketplace focused on workforce travel, crew accommodations, and logistics across North America and Australia.
Despite macroeconomic uncertainties and stock market volatility, its shares have surged sharply, delivering 85% returns over the last year. As a result, this TSX stock currently trades at $16.83 per share with a market cap of roughly $1.2 billion. The company also offers a quarterly dividend with a yield of 1.1%.
Strong quarterly growth highlights momentum
In the first quarter, Black Diamond’s total revenue climbed 27% year-over-year (YoY) to $130 million. The company’s adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) for the quarter also rose 21% YoY to $32 million, backed by strong demand across both operating segments.
One major driver behind this growth was its WFS segment, where revenue jumped by 54% YoY. Its recent acquisition of Royal Camp Services played an important role in boosting lodge services revenue and non-rental activity.
At the same time, the company’s MSS business also continued performing well as its rental revenue rose 5% YoY to $26.8 million, while utilization remained strong at 77.7%. The segment’s average monthly rental rates increased by 3% per unit, highlighting healthy customer demand and its pricing power.
Long-term growth opportunities remain strong
In Canada, elevated infrastructure activity and large-scale construction projects are driving demand for modular space rentals and workforce accommodations. Black Diamond could benefit from these long-duration investment trends.
Its WFS business also has a growing sales pipeline tied to resource projects, infrastructure developments, and potential defence-related spending opportunities.
Meanwhile, LodgeLink continues gaining traction. During the quarter, the platform delivered a 52% YoY increase in total trade value, helping drive net revenue growth of 37% YoY.
There’s also growing optimism around its Australian operations, which are starting to improve and may support future growth.
Why this TSX stock looks attractive right now
Black Diamond stock combines several qualities long-term investors often look for, including recurring rental revenue, strong industry demand, disciplined capital allocation, and multiple growth drivers. Also, the company maintains strong liquidity and relatively low leverage, giving it flexibility to pursue fleet expansion, acquisitions, debt reduction, and shareholder returns over time.
With the Bank of Canada holding interest rates stable, businesses tied to infrastructure, rental demand, and long-term development activity could continue to benefit from a supportive environment. And I expect Black Diamond to be one of them.
