North American Construction (TSX:NOA) is an Alberta-based company that provides equipment maintenance, and mining and heavy construction services in Canada, the United States, and Australia. Shares of this construction focused TSX stock have jumped 29% month-over-month as of close on Thursday, July 27. What is behind the stock’s recent spike? Is it worth buying more of North American Construction today? Let’s jump in.
On July 26, North American Construction announced that it was moving forward with an exciting acquisition of MacKellar Group. MacKellar Group is an Australian heavy equipment solutions provider. North American Construction acquired the smaller company for $395 million according to the report. This will allow NACG to dramatically expand its reach to global consumers. The spike following the news is more than justified.
Shares of this TSX stock have now climbed 87% in the year-to-date period. The company unveiled its second quarter fiscal 2023 earnings on July 26. NACG reported total revenue of $193 million – up from $168 million in the previous year. EBITDA stands for earnings before interest, taxes, depreciation, and amortization, aiming to give a clearer picture of a company’s profitability. This company reported adjusted EBITDA of $51.8 million in Q2 2023 and a margin of 18.7%, compared to $41.6 million and 18.3% in the prior year.
This TSX stock still possesses a favourable price-to-earnings ratio of 13 at the time of this writing. Moreover, it offers a quarterly dividend of $0.10 per share. That represents a modest 1.2% yield.
