Let me be direct: Chook Development (TSX:BDT) is likely one of the finest dividend shares you possibly can personal in Canada proper now. It pays a month-to-month dividend of $0.07 per share, which interprets to a yield of virtually 3%.
Valued at a market cap of $2 billion, the TSX dividend inventory has returned 64% to shareholders up to now yr and nonetheless trades at an inexpensive valuation. With a document $11 billion backlog, Chook Development stays a prime funding in March 2026. Let’s see why.
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The bull case for the TSX dividend inventory
Consider a backlog as an organization’s order ebook. A much bigger, higher-quality backlog signifies extra predictable income forward.
- Chook’s mixed backlog now stands at greater than $11 billion.
- That’s a forty five% bounce from 2024.
- Even higher, the margins embedded in that backlog are larger as we speak than at any level within the final decade, in accordance with Chief Monetary Officer Wayne Gingrich.
- Roughly 54% of that backlog is predicted to be transformed into income throughout the subsequent 12 months. That alone ought to give buyers critical confidence heading into 2026.
Chook Development reported income of $3.4 billion in 2025, which was flat yr over yr. Nonetheless, gross margins expanded to 10.5% from 9.7% over the past 12 months.
Adjusted earnings earlier than curiosity, taxes, depreciation, and amortization (EBITDA) rose to $222.1 million, indicating a margin of 6.5%, up 20 foundation factors yr over yr.
Chook is now simply 150 foundation factors away from its 2027 margin goal of 8%. And administration expects to get there whilst income accelerates.
Excessive progress market alternatives
Defence is a standout sector for the Canadian mid-cap inventory. The corporate’s defence backlog has surpassed $1.5 billion, whereas Canada’s Division of Nationwide Defence has outlined a $100 billion building plan over 10 years, together with $40 billion earmarked for the north over 20 years. Chook has deep Arctic expertise and is actively monitoring greater than 200 defence-related initiatives.
Knowledge centres are one other large alternative. Chook is monitoring greater than $20 billion in Canadian knowledge centre initiatives.
As President and CEO, Terrance McKibbon defined on the earnings name that the crucial path in knowledge centre building is electrical work, and that Chook is Canada’s largest electrical employer.
The nuclear sector is heating up, too, and presently accounts for 10% of the top-line. New credentials lately obtained by the corporate enable broader participation within the sector, simply as new-build exercise at Bruce Energy and different services is ready to ramp up.
After which there’s the acquisition of FRPD, a 115-year-old marine building and dredging agency. With Canadian port upgrades accelerating and commerce infrastructure changing into a nationwide precedence, FRPD opens a variety of latest alternatives for Chook.
A rising dividend
Chook pays a month-to-month dividend, which is all the time a pleasant function for revenue buyers. In 2025, it reported free money move of $72 million, or $1.30 per share, indicating a payout ratio of 64%. The annual payout is projected to extend from $0.84 per share in 2025 to $1.05 per share in 2027.
Analysts forecast adjusted earnings to increase from $1.94 per share in 2025 to $3.38 per share in 2027. If the Canadian inventory is priced at 15 instances ahead earnings, it may surge over 30% within the subsequent 12 months.
Chook’s book-to-bill ratio was 1.4 instances in 2025, that means it received $1.40 of latest work for each $1 of income it acknowledged. That ratio has constantly been above 1, an indication that the backlog retains rising.
For long-term buyers who need publicity to Canada’s infrastructure buildout, Chook Development checks almost each field. Robust dividend, document backlog, enhancing margins, and a administration staff with a transparent plan. That’s a mix value holding onto, probably eternally.
