Bird Construction Inc. (TSX:BDT) shares have gained more than 10% since Capital Ideas wrote about the company nearly six weeks ago
Capital Ideas Media | May 18, 2021 | SmallCapPower: Infrastructure should be on every investor’s mind, especially after U.S. President Biden’s more than $2 trillion proposed spending plan to upgrade everything from roads and bridges to schools and high-speed broadband.
(Originally published on Capital Ideas Media on April 6, 2021)
And in Canada, infrastructure expenditures are expected to be a big part of the federal budget tabled this month, as it is anticipated the Liberals will commit between $70 billion and $100 billion over the coming years on stimulus to help the economy recover from COVID-19.
Stocks such Bird Construction Inc. (TSX:BDT), then, are poised to perform well in the days and months ahead as the Company should receive its share of this infrastructure cash.
[Editor’s Note: Shares of Bird Construction have gained more than 10% since Capital Ideas wrote about the company about six weeks ago.]
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In business for more than 100 years, Bird provides construction services to clients in sectors such as energy, mining, institutional, retail, multi-tenant residential, industrial, water and wastewater, renewables, and nuclear.
Bird Construction, meanwhile, saw its fourth-quarter 2020 earnings surge 150% year over year to $20.5 million, on a 32% rise in revenue, the Company’s first full quarter after completing its $97 million acquisition of Western Canadian competitor Stuart Olson Inc. The integration of the two businesses is expected to result in cost savings of $25 million by the end of 2021.
Laurentian Bank Securities analyst Mona Nazir believes Bird’s acquisition of Stuart Olson is not fully realized in the Company’s stock price, saying its “book of business is (now) more diversified with reduced volatility and a greater percentage of recurring revenue.”
Ms. Nazir calls Bird Construction a “dominant player with cross-selling capabilities.”
While analysts at CIBC World Markets said Bird should begin to reap the benefits of pandemic delays in project work by the second half of 2021 and into 2022 (the Company ended 2020 with a record backlog of $2.7 billion).
And, Canaccord Genuity analysts wrote they like the “stock’s revenue visibility, valuation, strong balance sheet, and compelling 4.3% dividend yield.”
Indeed, the payout is the most attractive aspect of this investment but the Company’s growth prospects should provide a solid overall return for at least the next two years, especially as the Canadian economy recovers from COVID.
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