Source: Getty Images <\/p>\n
Written by Karen Thomas, MSc, CFA<\/a> at The Motley Fool Canada<\/p>\n Aecon Group (TSX:ARE<\/a>) is one of Canada\u2019s largest publicly traded construction and infrastructure development companies. The company generated $4.2 billion in revenue in 2024 and its current backlog is at record levels of $10.7 billion.<\/p>\n Let\u2019s take a look at why I think that this Canadian stock is the one to buy for exposure to increased public spending.<\/p>\n Before I get into the specifics on Aecon, I would like to review government spending plans.<\/p>\n The Parliamentary Budget Office (PBO) estimates that the Government of Canada will spend $159 billion on infrastructure in the next five years. The areas of focus are the same as they have been, but they bear repeating. They include investments in public transit, renewable energy<\/a>, communities and housing, trade and transportation, and rural and northern communities.<\/p>\n This spending boom is a big part of what\u2019s driving Aecon\u2019s growth and with the investments still underway, it will continue to drive growth in the future. Aecon\u2019s stock price has already been reflecting this positive infrastructure spending environment. As you can see from the graph below, the stock has rallied 74% in the last five years.<\/p>\n In Aecon\u2019s latest quarter, the impact of all of this spending was evident. Adjusted revenue came in at $1.3 billion, 31% higher than the same period last year. This was driven by strength in nuclear spending in Ontario and the US, as well as strength in civil spending, which includes road building and mass transit spending. Finally, it was driven by spending on utilities and gas distribution infrastructure.<\/p>\n While Aecon\u2019s bottom line results were less than impressive, with earnings per share (EPS)<\/a> coming in at a loss of $0.09, there is light at the end of the tunnel for the company\u2019s profitability. Management\u2019s focus remains on improving profitability.<\/p>\n In the last five years, Aecon\u2019s business has benefitted from all of these positive trends. And this is reflected in the company\u2019s financial results. For example, revenue increased 16.4% to $4.2 billion in this time period and its net income increased 122% to $161.9 million. Also, Aecon\u2019s backlog is at record levels.<\/p>\n Before I close off, I would like to review Aecon\u2019s bottom-line performance \u2013 a net loss. Cost overruns and challenges on pandemic-era projects are to blame. This will no longer be an issue as these projects reach full completion. Aecon\u2019s new way of doing things is all about minimizing the risks and maximizing profitability. For example, the company has a strong recurring revenue base and has taken a lot of the risk out of its projects by entering into partnerships, so as to limit its debt load.<\/p>\n Aecon is the Canadian stock to own today to benefit from the infrastructure spending boom. This boom reflects the significant amount of infrastructure investment underway in North America. The current infrastructure is simply old and in need of replacement and\/or updating. Also, the transition to a net zero economy is necessitating significant investments in order to build out the infrastructure to support this transition.<\/p>\n The post Why This Canadian Stock Is Perfect for a Boom in Public Spending<\/a> appeared first on The Motley Fool Canada<\/a>.<\/p>\n Before you buy stock in Aecon Group Inc., consider this:<\/p>\n The Motley Fool Stock Advisor Canada analyst team identified what they believe are the 15 best stocks for investors to buy now\u2026 and Aecon Group Inc. wasn\u2019t one of them. The 15 stocks that made the cut could potentially produce monster returns in the coming years.<\/p>\n Consider MercadoLibre, which we first recommended on January 8, 2014 \u2026 if you invested $1,000 in the \u201ceBay of Latin America\u201d at the time of our recommendation, you\u2019d have $22,332.38!*<\/p>\n Now, it\u2019s worth noting Stock Advisor Canada\u2019s total average return is 105%* \u2013 a market-crushing outperformance compared to 73%* for the S&P\/TSX Composite Index. Don\u2019t miss out on our top 15 list, available when you join Stock Advisor Canada.<\/p>\n See the 15 Stocks <\/a><\/p>\n * Returns as of October 9th, 2025<\/p>\n More reading<\/p>\n Fool contributor Karen Thomas<\/a> has a position in Aecon. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy<\/a>.<\/p>\n 2025<\/p>\n","protected":false},"excerpt":{"rendered":"Source: Getty Images Written by Karen Thomas, MSc, CFA at The Motley Fool Canada Aecon Group (TSX:ARE) is…\n","protected":false},"author":2,"featured_media":221353,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[106372,49,48,41513,18182,51407,28659,44,106371],"class_list":["post-221352","post","type-post","status-publish","format-standard","has-post-thumbnail","category-canada","tag-aecon","tag-ca","tag-canada","tag-canadian-stock","tag-fool-canada","tag-government-of-canada","tag-infrastructure-development","tag-news","tag-public-spending"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/221352","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=221352"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/221352\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/221353"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=221352"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=221352"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=221352"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}