A Consistent Monthly Payer With a Modest 2.5% Dividend Yield

Bird Construction (TSX:BDT) isn’t the flashiest stock on the Toronto Stock Exchange. But for income investors who value consistency over hype, the Canadian dividend stock could be the kind of name worth adding to your watchlist right now.

Here’s our take: Bird is a solid buy for several reasons. The monthly dividend is reliable, the backlog is enormous, and the business is quietly building real momentum heading into 2026 and beyond.

A $11 billion backlog

Let’s start with what matters most. Bird ended 2025 with a combined backlog of more than $11 billion, a 45% jump from the year before.

• About 54% of that backlog is expected to be recognized over the next 12 months. The rest provides multiyear revenue visibility that most construction companies can only dream about.
• Notably, the margins embedded in that backlog are higher today than at any point in the last 10 years, according to Chief Financial Officer Wayne Gingrich.

In plain English, Bird has more work lined up, and it’s more profitable work.

Full-year 2025 revenue came in at $3.4 billion, roughly flat compared to 2024. That sounds underwhelming at first. But the flat revenue was mostly due to timing delays as clients pushed back project starts amid broader economic uncertainty. The demand never went away and was delayed by a few months.  

Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin improved to 6.5% for the full year, up 20 basis points from 2024. The company is now just 150 basis points away from its 2027 target of 8%.

A growing dividend

Bird pays a monthly dividend of $0.07 per share, and the payout has more than doubled over the last four years. It offers a 2.5% yield, and the TSX dividend stock is projected to increase its annual payout to $1.05 per share in 2027. Moreover, Bay Street forecasts free cash flow to increase to $147 million in 2027, up from just $22 million in 2022.

In the last three years, BDT stock has returned 363% in dividend-adjusted gains to shareholders. If we expand the investment horizon to 10 years, cumulative returns are closer to 440%.

In 2025, BDT reported a free cash flow of $71.8 million or $1.30 per share, indicating a payout ratio of 64%. The free cash flow was impacted by a one-time $62.2 million impairment charge related to a single customer’s credit issue. Strip that out, and the cash flow picture looks even stronger.

The balance sheet is clean. Bird holds $167 million in cash, has another $399 million available under its credit facility, and carries an adjusted net debt-to-EBITDA ratio of just 0.82 times. There’s no obvious threat to the dividend here.

The bull case for the dividend stock

Bird isn’t just a passive beneficiary of Canada’s infrastructure boom. The company is actively winning in some of the country’s fastest-growing sectors.

The defence backlog has surpassed $1.5 billion. Moreover, Bird is tracking more than 200 defence-related projects, many of which are tied to a $100 billion Department of Defence construction plan over the next decade.

In data centres, Bird is tracking over $20 billion in opportunities. As Bird CEO Teri McKibbon explained on the earnings call, “the critical path in data centre construction is electrical scope,” and Bird is Canada’s largest electrical employer. That’s a genuine competitive edge.

Nuclear work currently accounts for 10% of revenue, with new certifications recently obtained that open the door to reactor-phase construction. New nuclear builds at Bruce Power and Wesleyville could be transformational.

The Foolish takeaway

Bird isn’t a get-rich-quick story. It’s the kind of steady, compounding business that rewards patient investors.

A record backlog, improving margins, double-digit revenue growth expected in 2026, and a monthly dividend supported by clean cash flow make BDT a compelling hybrid of income and growth at current levels.

If you’re building a long-term portfolio with Canadian equities, the TSX dividend stock deserves a close look.

The post A Consistent Monthly Payer With a Modest 2.5% Dividend Yield appeared first on The Motley Fool Canada.

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More reading

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Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.