Why “slow housing starts” doesn’t signify the end of construction
Even though residential demand may be tapering, especially for condominiums, expenditures in commercial, industrial, and infrastructure sectors can take a different path, sometimes even rising when housing slows down.
What shifted from 2025 to 2026 (and the significance of the latter half)
Mike outlines how the positive trends observed in early 2025 gave way to diminished demand, a decrease in interest for condos, slower population expansion, and investors exercising caution due to tariffs and political instabilities.
The true factors influencing construction profits: rates, expenses, and inventory
Learn why construction is greatly affected by capital, sensitive to interest rates, and dependent on margins, where low-cost debt is advantageous but increasing rates can negatively impact builders and purchasers.
Identifying a bull trap in homebuilders and construction shares
Things can be misleading; even when the outlook appears bright, it might be a setup, especially if there’s an accumulation of inventory, dwindling demand, and halted projects.
Two challenges that significantly impact industrial/infrastructure contractors
- Backlog risk: cancellations and delays can quickly eliminate expected growth.
- Contract risk: if costs are not accurately projected, long-term projects can turn unprofitable.
How AI evolves into a construction narrative (not merely a tech tale)
Infrastructure associated with data facilities, power systems, utility expansion, and energy production entails engineering, construction, and specialized gear, creating prospects beyond just the technological field.
An investor’s brief overview of select construction firms
- Bird Construction (BDT.TO): provides a wide range of services and growth from sectors such as defense, healthcare, nuclear, and data centers, though Mike recommends looking past immediate performance.
- Aecon Group (ARE.TO): possesses a robust infrastructure story, although past contract-cost challenges underscore how quickly profits can drop.
Why Mike favors engineering firms over traditional construction companies
Engineering firms engage throughout a project’s duration, offering planning, construction, upkeep, and decommissioning, resulting in a diverse income stream that enhances durability.
WSP Global vs. Stantec: the dividend consideration is crucial
WSP exhibits business robustness but prioritizes acquisitions over dividend growth; Stantec is better suited for those looking for dividend increases, underscoring the need to match with investment goals.
Home Depot & Lowe’s: the patience strategy post-renovation surge
Following COVID, consumer expenditure remains with a shift towards smaller projects, affecting same-store sales and average ticket amounts, thereby slowing the Dividend Triangle.
Construction-related selections often overlooked by investors
Richelieu Hardware, Fastenal, Finning, Toromont, and Paccar thrive during construction cycles, frequently with diversified exposure beyond homebuilders.
Mike’s fundamental strategy: avoid “riding a single wave”
Instead of honing in on a single construction trend, Mike relies on the Dividend Triangle and assesses strong indicators, particularly during periods of low market sentiment.
How the free Dividend Rockstar List accelerates your buy list creation
Use the list to sift through companies with increasing revenue, earnings, and dividends, then perform an in-depth analysis on a refined pool of quality candidates.
Related Content
Mike and Véronique delve into the possibility of an AI bubble, comparing it with the dot-com era, and pinpoint four major tech firms that are likely to endure setbacks while maintaining their long-term potential.