Should you’ve by no means heard of Stella-Jones (TSX:SJ), you’re not alone. However that is perhaps about to alter. This quiet Canadian inventory has constructed a robust enterprise that retains buzzing alongside, churning out revenue, money circulation, and shareholder returns, all with out a lot fanfare. So, in case you’re in search of one thing to tuck away for the lengthy haul, this may simply be your no-drama winner.
About SJ
Stella-Jones makes the belongings you don’t take into consideration, like utility poles, railway ties, and pressure-treated wooden, however cities and industries can’t operate with out them. That makes its enterprise boring in one of the simplest ways. Infrastructure demand doesn’t vanish in a downturn. That’s precisely why this Canadian inventory has held its personal in a uneven market.
Let’s speak outcomes. Within the second quarter of 2025, Stella-Jones pulled in over $1 billion in gross sales, with web earnings hitting $106 million, or $1.91 per share. Certain, income dipped 1% from the identical interval final yr, however that was coming off a excessive base. Earnings earlier than curiosity, taxes, depreciation, and amortization (EBITDA) got here in at $189 million with a margin of 18.3%, solely barely down from the earlier yr’s 19.1%. So, this enterprise stays a cash-generating machine, at the same time as volumes for railway ties and utility poles got here beneath strain.
Over the previous yr, the inventory has slipped round 14%, falling from its 52-week excessive of $94 to about $77. That’s not a collapse, and it really makes the present entry level extra enticing for long-term buyers — particularly when you think about that earnings per share (EPS) for the primary six months of 2025 hit $3.58, up from $3.30 final yr. That form of underlying energy usually precedes a comeback.
Extra to return
The Canadian inventory has been busy reinvesting, too. In Could, it acquired Locweld, a metal transmission construction producer, for $58 million. That transfer provides it a brand new leg within the infrastructure world with metal towers for energy grids. With governments spending billions to modernize utilities, this might be a wise growth. It matches proper into Stella-Jones’s technique of being in all places infrastructure must be.
Even because it invests, it’s returning money. The Canadian inventory returned $54 million to shareholders final quarter by way of dividends and buybacks and has already hit $417 million out of a $500 million capital return aim. It at the moment yields round 1.5%, with a payout ratio beneath 20%. That’s not an enormous yield, nevertheless it’s extraordinarily well-covered, with room for will increase as money circulation grows. At writing, a $7,000 funding might nonetheless herald $111 every 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 |
Issues
Debt is beneath management, with web debt-to-EBITDA sitting at 2.4 occasions. That leaves room for extra acquisitions or buybacks with out stressing the steadiness sheet. And liquidity stays excessive, with $693 million obtainable to assist operations and development — not unhealthy for an organization many Canadian buyers have by no means taken the time to look into.
As for outlook, Stella-Jones trimmed its full-year income forecast barely to $3.5 billion from $3.6 billion, citing slower gross sales of utility poles and railway ties. However the necessary half is that it reaffirmed its goal for EBITDA margins above 17%. That’s the place the cash is made, and the place this Canadian inventory proves it is aware of methods to keep worthwhile by way of cycles.
Backside line
Should you’re hoping to seek out the following moonshot inventory, this isn’t it. Stella-Jones doesn’t make daring guarantees. It builds issues. It owns its area of interest, and it retains stacking money, one handled pole at a time. That’s what makes it top-of-the-line Canadian shares you’ve most likely by no means heard of. It’s not flashy, nevertheless it works. For buyers who like sleeping properly at night time, that may be one of the best choose of all.
