If you’re looking for Canadian stocks with real staying power, Stella-Jones (TSX:SJ) and West Fraser Timber (TSX:WFG) deserve a spot on your radar, but for very different reasons.
Canada’s infrastructure buildout is accelerating. For instance, grid hardening, electrification, and the growing demand for transmission infrastructure should create a long runway for companies tied to essential materials.
That’s the backdrop that makes these two names interesting in 2026, but only one of them is firing on all cylinders right now.
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The bull case for this TSX timber stock
Stella-Jones just wrapped its 25th consecutive year of sales growth. At its May 2026 Annual Meeting, President and CEO Eric Vachon told shareholders the company delivered approximately $3.5 billion in sales in 2025, with an EBITDA (earnings before interest, tax, depreciation, and amortization) margin close to 18% and more than $550 million in operating cash flow.
Over the previous three-year period, it also returned $506 million to shareholders, exceeding the commitment it made at the start of that stretch.
The engine behind that growth is utility products such as wood utility poles used across North America’s power grid. Demand softened for a while, then came roaring back in the second half of 2025.
“Utility Products remains exceptionally well positioned for long-term growth,” Vachon said, pointing to aging infrastructure, grid hardening, and electrification as long-term demand drivers.
Its acquisitions of Lockwell and Brooks expanded its presence in steel transmission structures and wood crossarms, giving the company a larger footprint in the transmission and distribution sector. A new steel lattice tower facility is also in the works in Fayetteville, Tennessee.
In Q1 of 2026, it reported revenue of $791 million, an increase of $18 million year over year. It reported a free cash flow of over $400 million in 2025 and ended Q1 with $646 million in available liquidity. The board recently raised the quarterly dividend 10%, to $0.34 per share, which translates to a yield of almost 2%.
Looking ahead, the Canadian dividend stock is targeting roughly $4 billion in sales by 2028, with EBITDA margins in the 17.5%-18.5% range and annual earnings-per-share growth of more than 10%.
Is this Canadian timber stock a good buy?
Valued at a market cap of $6.5 billion, West Fraser stock is down 22% in the past year. In 2025, it generated just $56 million in total adjusted EBITDA as elevated mortgage rates, affordability pressures, and new supply entering the OSB (oriented strand board) market all weighed on results.
At its April 2026 Annual Meeting, President and CEO Sean McLaren reminded shareholders that the company’s strategy hasn’t changed in 70 years: to be a low-cost producer, reinvest in the business, and maintain a prudent balance sheet.
Over the past nine-plus years, West Fraser has generated more than $10 billion in cash from operations and returned over $5 billion to shareholders through buybacks and dividends. Even after a difficult 2025, it exited the year with over $1.2 billion in available liquidity.
McLaren noted that as 2026 entered the second quarter, regional lumber prices were improving, and OSB prices had ticked higher, driven by seasonal demand.
The company also spent 2025 closing and curtailing uneconomic facilities to set up a leaner, more competitive footprint for the next upcycle.
Approximately 13,000 Americans are expected to turn 35 every day for the next decade, driving sustained demand for new housing. Governments across Canada and the U.S. continue to identify housing supply as a top priority.
Analysts tracking the TSX dividend stock forecast free cash flow to surpass $900 million in 2030, compared to an outflow of $315 million in 2025.
The Foolish takeaway
Stella-Jones is the stronger near-term story. It’s growing revenue, raising its dividend, expanding into new infrastructure markets, and delivering consistent results through economic ups and downs. The utility infrastructure tailwind looks durable.
West Fraser requires more patience. The fundamentals are weak today, but the balance sheet is strong, the strategy is proven, and the setup for a recovery trade is real.
