2026 has already been a bizarre 12 months for Canadian shares. Software program shares have indiscriminately been offered off, no matter whether or not AI might damage or assist their enterprise. The identical sell-off has began to influence service shares. This sell-off appears much more befuddling.
Supply: Getty Photos
Colliers: A high growth-at-a-reasonable value inventory
Colliers Worldwide Group (TSX: CIGI) is among the shares that has been affected by this commerce. This $7.6 billion inventory is down 22% prior to now 5 days and 26.5% because the begin of the 12 months.
The large sell-off is somewhat confounding. Colliers is a number one world supplier of actual property providers, engineering and challenge administration, and funding administration. Most of its providers require extremely expert professionals that supply onsite experience and administration.
Robust year-end outcomes for Colliers in 2026
Colliers simply introduced its year-end outcomes final week. Whereas it missed quarterly expectations, it was hardly a cause for a 20% sell-off. In truth, Colliers delivered nice year-end outcomes.
Web income rose 14% to $4.9 billion, of which 5% was natural progress. Adjusted earnings earlier than curiosity, tax, depreciation, and amortization (EBITDA) likewise elevated 14% to $732.5 million. Adjusted earnings per share (EPS) was up 14% to $6.58.
Over 70% of the corporate’s revenue got here from recurring revenues. It additionally loved very sturdy money circulate conversion of 105% of earnings.
Colliers has been rising by a mixture of natural initiatives and acquisitions. It has primarily targeted on bolstering its rising engineering franchise. Nonetheless, it made actual property and funding administration tuck-ins throughout the 12 months.
Colliers has all of the hallmarks of a top quality inventory
It’s the diversification that makes this enterprise attention-grabbing. Its industrial actual property enterprise will be very worthwhile, however it can be cyclical and lumpy. Fortunately, it’s complemented by property administration and valuation revenues with greater recurrence and predictability.
Likewise, its engineering enterprise has a give attention to challenge administration. Usually, its initiatives can final years and even many years, so the income streams it earns are very a lot recurring. Funding administration presents recurring, excessive margin revenue. Immediately, Colliers is rather more than the brokerage enterprise that it was identified for prior to now.
Its CEO, Jay Hennick, is the most important proprietor with an over 10% stake within the firm. General, insiders personal round 15% of the corporate. Colliers advantages strategically from a partnership mannequin whereby newly acquired managers get a stake in Colliers’ inventory.
For 2026, Colliers is focusing on mid-teens income, adjusted EBITDA, and EPS progress. Whereas its leverage (2.7 instances debt-to-EBITDA) has risen on account of a number of main acquisitions in early 2026, it does count on sturdy free money flows will convey that into the low two instances leverage vary.
The Silly bottomline
After the pullback, Colliers’ inventory seems enticing. It trades with a free money circulate yield of 8%, a ahead price-to-earnings ratio of solely 14.6, and an enterprise value-to-EBITDA ratio of 10.
For an organization that has grown by a 15% compounded annual progress charge over the previous 5 years (and will develop by the same charge in 2026), it looks like a really moderately priced inventory after the pullback. If I had $1,000, Colliers could be a inventory I’d look so as to add to my portfolio now.