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Watchlists-Penny Stock Investment Strategy

Construction Stocks in Canada: Top Picks for 2024

Written by Tim-bot
Reviewed by Friedrich Odermann Fact-checked by Ed Weinberg
Updated 11/17/2023 13 min read

Construction Stocks Canada refers to shares in companies involved in the building and development sector in Canada. These stocks offer traders a way to capitalize on Canada’s bustling construction industry, encompassing everything from residential homes to commercial infrastructure. As someone who has been trading patterns for years, I can tell you that these stocks add another layer of opportunity to your portfolio.

You should read this article because it dives deep into the intricacies of investing in Canadian construction stocks, offering actionable insights backed by years of trading experience.

I’ll answer the following questions:

  • What are construction stocks in Canada?
  • How is the Canadian construction industry structured?
  • What factors should you consider when investing in construction stocks?
  • What are some top construction stocks in Canada for 2024?
  • How can you buy construction stocks in Canada?
  • What are the risks associated with investing in construction stocks?
  • Are there any construction ETFs available for investors in Canada?
  • How do construction stocks fare compared to other sectors in Canada?

Still with me? Good. Now let’s dig into the details.

What Are Construction Stocks?

Construction stocks are shares in companies involved in construction work, ranging from residential building to infrastructure projects. These businesses could be contractors, engineering firms, or providers of construction services and tools. They form an integral part of both the construction industry and the stock market. You’ve heard me say it before, and I’ll say it again: know your stock and its sector. In my years of teaching trading, I’ve seen too many new traders dive into stocks without understanding the industry.

Investing in construction stocks is like any other form of investing; you’re buying a piece of the company. What sets it apart is its ties to both economic development and residential growth, making it a unique sector in any investment portfolio. Just like how you’d research a penny stock before trading, understanding the intricacies of the construction industry can make or break your investing decisions.

You’ve heard me say it before: know your stock and its sector. But let’s not forget, construction stocks aren’t just about buildings and infrastructure. They can also be about specialized services like engineering, design, and even tech solutions for construction management. This versatility can offer you multiple avenues for investment within the same sector. If you’re looking to diversify your understanding of stock types, don’t miss this guide on different types of stocks.

Understanding the Canadian Construction Industry

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The Canadian construction industry is like a multilayered cake, okay? You’ve got builders on one level, then offices, residential sites, and infrastructure projects on another. It’s not all hammer and nails; it involves complex financing, often with big banks providing the funds. The placement of money here varies—some go for long-term investments, hedging their bets on futures and mortgages, while others play the quick trades.

I can tell you from experience that you need to know what you’re doing before jumping in. You’ve got firms like SNC-Lavalin Group Inc. shaping the skyline in Toronto and other companies eyeing overseas expansion in countries like Australia and the United Kingdom. It’s not just about price and dividends; it’s also about understanding trade histories, market results, and the economic data that go along with it. Opinions are many, but credible advice can be scarce. Always cross-check your information, people.

Industry Valuation and Performance

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The Canadian construction industry is more than just hammers and nails; it involves intricate engineering and design roles and has a substantial valuation in terms of market cap and revenue. Knowing a company’s financial standing is essential. I can’t tell you how many times people ignore financial ratios and dividend yields, which are vital in making informed decisions. Don’t ignore the numbers; they tell a story.

Management is another factor to consider when looking at construction companies in Canada. Who are the directors? How well do they manage projects and clients? Understanding these elements can provide an investor with greater confidence. With decades of trading and teaching experience, I can attest that management can drastically impact a stock’s performance.

Industry Trends

We’re talking about a dynamic sector here. Whether it’s green construction materials or the use of AI in site management, staying ahead of trends is crucial. Always look for companies willing to adapt and innovate. I’ve been teaching long enough to know that a company stuck in its ways isn’t going to grow your portfolio.

The industry also taps into other sectors like energy, water, and transportation. As a trader, these are facets you shouldn’t ignore when considering construction stocks. Understanding cross-sector dynamics can offer a broader range of investment opportunities. Don’t just tunnel-vision on the company name and stock ticker.

Top Construction Stocks in Canada for 2024

My top Canadian construction stock picks are:

The choices here will vary depending on your portfolio needs. While dividends might lure some investors, others might focus on stock price and trading volumes. The Toronto Stock Exchange (TSX) is where you’ll find these gems, but remember, consult a full table of data and history before making any moves. Trust but verify, right?

Here are a few names to look at …

Before you send in your orders, take note: I have NO plans to trade these stocks unless they fit my preferred setups. This is only a watchlist.

The best traders watch more than they trade. That’s what I’m trying to model here. Pay attention to the work that goes in, not the picks that come out.

Sign up for my NO-COST weekly watchlist to get my latest picks!

WSP Global (TSX: WSP)

My first Canadian construction stock pick is WSP Global (TSX: WSP).

WSP Global is no small fry; we’re talking big projects with a track record that demands respect. Their offerings in engineering services are like the Swiss Army knife for builders — versatile and reliable.

Stantec (TSX: STN)

My second Canadian construction stock pick is Stantec (TSX: STN).

Stantec? Think design and consulting services for builders. This company knows what it’s doing and has been consistently maintaining its dividend levels. Based out of Edmonton but with a hefty presence in countries outside Canada, their reach is vast. The details and results speak for themselves.

Badger Infrastructure Solutions (TSX: BDGI)

My third Canadian construction stock pick is Badger Infrastructure Solutions (TSX: BDGI).

BDGI is a cornerstone in the Canadian construction industry, specifically in utility services. When looking at their offerings, they have their fingers in a lot of pies — from excavation to, well, infrastructure solutions.

Bird Construction (TSX: BDT)

My fourth Canadian construction stock pick is Bird Construction (TSX: BDT).

Bird is an interesting play. They’ve got a portfolio that’s diverse and crosses multiple sectors. Their logo is recognizable in the Canadian construction space, and for good reason. You’ll see them in both commercial and residential sectors, and their level of expertise is top-notch.

Doman Building Materials (TSX: DBM)

My fifth Canadian construction stock pick is Doman Building Materials (TSX: DBM).

DBM is another one with significant offerings, focusing on the builders and contractors. Specializing in building products, they also have a strong standing on the TSX. The company’s features make it accessible for investors of all levels.

Investing in Canadian Construction Companies

You want to invest in construction companies, but what’s the game plan? Are you looking for quick trades, or are you playing the long game? Both have their pros and cons. Long-term portfolios will often include a blend of stocks, sometimes even adding construction to diversify. Banks are often involved in the financing, especially in the larger projects.

From my years of trading, I’d say tread carefully, especially if you’re new to this. Look into IPOs for upcoming opportunities and examine the financials—ratios, money involved, the works. Remember, investing isn’t a one-size-fits-all glove. Your friend’s needs won’t necessarily align with yours. Always perform your own due diligence and tailor your investment decisions to your financial goals.

If you’re considering long-term investment, don’t overlook the dividend aspect. Some construction companies offer decent dividends, providing you with a steady income stream. This can be a game-changer for those who are not just looking for capital appreciation but also a regular payout. If dividends pique your interest, here’s a guide on penny stocks that pay dividends.

How To Buy Construction Stocks

It’s simpler than you think but requires due diligence. You can buy these stocks through various stock exchanges, either by using an online trading platform or through your bank. Platforms offer different tools and options, and it’s essential to choose one that fits your investment goals. Even in my penny stock trading, the platform makes all the difference.

When it comes to trading platforms, StocksToTrade is first on my list. It’s a powerful trading platform that integrates with most major brokers. I helped to design it, which means it has all the trading indicators, news sources, and stock screening capabilities that traders like me look for in a platform. All my ideas on positions to take come from this firsthand research.

I use StocksToTrade to scan for news, tweets, earning reports, and more — all covered in its powerful news scanner. It has the trading indicators, dynamic charts, and stock screening capabilities that traders like me look for in a platform. It also has a selection of add-on alerts services, so you can stay ahead of the curve.

Grab your 14-day StocksToTrade trial today — it’s only $7!

Factors To Consider When Investing

When investing in construction stocks, factors like market volatility, interest rates, and company valuation are pivotal. Portfolio diversification is key. I’ve taught hundreds of students, and those who spread their risk are the ones who often see better returns. In construction, companies can be vulnerable to economic shifts, so understanding the business cycle is crucial.

Market volatility and interest rates are crucial, but what about growth prospects? Some construction stocks are also classified as growth stocks, meaning they have the potential for significant capital appreciation. However, these stocks can be volatile and may not offer dividends. It’s essential to weigh the pros and cons based on your investment strategy. For more insights into the complexities of growth stocks, check out this guide on growth stock blues.

Key Takeaways

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We’ve covered a lot. Construction stocks offer a robust and dynamic sector for investment in Canada. They’re deeply linked with economic and residential development. A diverse portfolio, which includes a variety of sectors, can offer you the best opportunities. Remember, my years in the trading world back this up.

Trading isn’t rocket science. It’s a skill you build and work on like any other. Trading has changed my life, and I think this way of life should be open to more people…

I’ve built my Trading Challenge to pass on the things I had to learn for myself. It’s the kind of community that I wish I had when I was starting out.

We don’t accept everyone. If you’re up for the challenge — I want to hear from you.

Apply to the Trading Challenge here.

Trading is a battlefield. The more knowledge you have, the better prepared you’ll be.

What construction stocks are on your watchlist? Let me know in the comments — I love hearing from my readers!

FAQs About Canadian Construction Stocks

How Do Construction Stocks Fare Compared to Other Sectors in Canada?

Generally, construction stocks show moderate to high volatility, which means there’s both risk and opportunity involved. As with trading in any sector, due diligence is essential. Remember, I’ve made a living off trading by always keeping my risk tight and cutting losses quickly.

What Are the Risks Associated With Investing in Construction Stocks?

Risks include economic downturns, policy changes, and interest rate hikes, among others. Understand what you’re getting into before making any decisions. My teaching philosophy has always been about making informed choices.

Are There Any Construction ETFs Available for Investors in Canada?

Yes, construction ETFs provide an alternative for those looking to diversify within this sector. These funds encompass a range of construction stocks, offering you a safer bet if you’re not sure which individual company to invest in. Always remember, no matter what you’re investing in, do your homework first.

What Content Should I Know About Canadian Stock Exchanges?

Before opening an account to trade on Canadian stock exchanges, it’s crucial to familiarize yourself with the content available about the markets, trading rules, and the stocks listed. Always read the disclaimer on any platform you choose to ensure you understand the risks involved.

What Plans and Equipment Do Residents Need?

Canadian residents interested in trading should have a well-thought-out trading plan. Your plans should cover everything from the types of stocks you aim to invest in, the investment goals, to the rights you have as an investor. Additionally, make sure you have the necessary equipment, like a reliable computer and internet connection, to execute your trades smoothly.

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Timothy Sykes

Tim Sykes is a penny stock trader and teacher who became a self-made millionaire by the age of 22 by trading $12,415 of bar mitzvah money. After becoming disenchanted with the hedge fund world, he established the Tim Sykes Trading Challenge to teach aspiring traders how to follow his trading strategies. He’s been featured in a variety of media outlets including CNN, Larry King, Steve Harvey, Forbes, Men’s Journal, and more. He’s also an active philanthropist and environmental activist, a co-founder of Karmagawa, and has donated millions of dollars to charity. Read More

* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”