Small caps to watch: dividend increase, CEO resignation and more

The world of small-cap stocks often reveals exciting opportunities for investors looking to diversify their portfolios. As market dynamics shift, certain companies stand out due to strategic decisions, financial performance, and growth potential. In this article, we will explore several small-cap companies that are currently making headlines, diving into their latest developments and what these might mean for investors.

Overview of the small-cap market trends

In recent trading sessions, Canada’s S&P/TSX Small Cap Index reached a remarkable milestone of 1,350.93, showing an impressive increase of about 63% over the past year. In contrast, the Russell 2000 index in the United States grew approximately 16% during the same timeframe, illustrating a robust performance in the small-cap sector.

Such rapid growth can often be attributed to various factors, including economic recovery, strategic acquisitions, and favorable market conditions for specific industries. Investors should consider the implications of these trends when evaluating potential investment opportunities.

MTY Food Group: A strong dividend increase

MTY Food Group Inc. has garnered attention after announcing a 12% increase in its quarterly dividend. This adjustment raises the dividend from 33 cents to 37 cents per share and will be payable on February 13 to shareholders on record as of February 3.

The CEO, Eric Lefebvre, expressed that this increase reflects the board's confidence in the company’s sustainable cash flow generation and long-term value delivery. This dividend hike marks the 13th increase since the company initiated its dividend policy in November 2010, showcasing a consistent commitment to returning cash to shareholders.

• The dividend was suspended in April 2020 due to the pandemic but was reinstated in July 2021.
• Analysts believe MTY's capital allocation strategy targets a dividend payout of 15-20% of free cash flow.

Leadership changes at North American Construction Group

In a surprising turn of events, North American Construction Group Ltd. announced the resignation of its president and CEO, Joe Lambert, who is leaving to pursue new opportunities. Barry Palmer, the current chief operating officer, will step in as the interim president and CEO while the company searches for a permanent replacement.

This leadership transition comes alongside the news that the company’s acquisition activities, particularly regarding Iron Mine Contracting, remain on track for completion this quarter, indicating continuity in its strategic goals.

Birchcliff Energy: Strong future outlook

Birchcliff Energy Ltd. has captured investor interest with its recent guidance for 2026, predicting significant profitable production growth. The company expects to reach an annual production of 105,000 barrels of oil equivalent per day (boe/d) by 2030.

The planned capital expenditure for finding and developing new resources is estimated between $325 million to $375 million for 2026, which is projected to yield an average production of 81,000 to 84,000 boe/d.

Birchcliff's outlook indicates:

• Adjusted funds flow of $430 million.
• Free funds flow ranging from $55 million to $105 million.
• The expectation that near-term natural gas prices will remain strong, driven by ongoing energy demands.

Canfor Pulp Products: Acquisition attempt and market position

Canfor Pulp Products Inc. recently concluded its “go-shop” period without receiving any acquisition proposals after a takeover bid from Canfor Corp., which already owns a 54.8% stake in Canfor Pulp.

During this period, Canfor Pulp was allowed to seek other offers, but as of January 19, it will be bound by non-solicitation agreements. Canfor has proposed to purchase the remaining shares at an exchange rate of 0.0425 Canfor shares per Canfor Pulp share or offer a cash option of 50 cents per share.

Roots Corp: New strategic partnership

Roots Corp. has announced a significant 10-year strategic partnership with Metro Supply Chain, a Canadian logistics provider. This move involves transitioning its distribution from a company-operated facility to Metro's facility in Ontario, which is expected to streamline operations and enhance supply chain efficiency.

CEO Meghan Roach emphasized that this partnership aligns with their growth strategy, aiming to enhance the omnichannel experience for customers and solidify the brand's market position.

Recent acquisitions and investments in the mining sector

Silvercorp Inc. has made headlines by acquiring a 70% stake in Chaarat ZAAV for $162 million. This deal encompasses the Tulkubash/Kyzyltash gold projects, expanding Silvercorp's footprint in the mining sector. The joint venture with Kyrgyzaltyn will allow Silvercorp to manage the assets while ensuring a 30% free-carried interest for the Kyrgyz government.

Goodfood Market Corp: Challenges in the meal kit industry

<pConversely, Goodfood Market Corp. faced difficulties, reporting a decline in sales and a widening loss for its first quarter. Sales dropped to $28 million compared to $34.7 million in the previous year, resulting in a net loss of $2.6 million.

Executive Chairman Selim Bassoul stated that the meal kit sector remains under pressure, indicating a need for strategic adjustments to adapt to current market conditions.

Lucara Diamond Corp: Financial challenges ahead

Lucara Diamond Corp. is seeking a financial hardship exemption from the Toronto Stock Exchange to facilitate a non-brokered private placement aimed at raising $165 million. The company cites serious financial difficulties as the reason for this request, emphasizing that the funds will be critical for advancing the Karowe underground project.

CEO William Lamb reassured stakeholders of the company’s commitment to long-term value creation despite these challenges.

Curaleaf Holdings: Adjustments in the cannabis market

Curaleaf Holdings Inc. has announced that it will discontinue its hemp division in light of new federal regulations. This decision comes alongside preliminary unaudited results indicating a projected fourth-quarter revenue of at least $330 million, slightly above the previous year’s figures.

CEO Boris Jordan noted that the strategic focus is now on core business operations, which should yield better results moving forward.

Mullen Group: Revenue expectations and strategic outlook

Mullen Group Ltd. has outlined its revenue expectations for fiscal 2025, estimating around $2.1 billion in line with previous forecasts. However, the adjusted operating income is expected to be lower than anticipated due to various market pressures, including competitive pricing.

Looking ahead to 2026, Mullen anticipates growth driven by improved freight demand and strategic acquisitions.

Dynacor Gold Mines: A return to strong performance

Dynacor Gold Mines Ltd. reported a remarkable rebound in its preliminary results for the fourth quarter, surpassing analyst expectations. The company predicts sales between $530 million and $580 million for 2026, reflecting strong operational performance at its Veta Dorada plant in Peru.

Analysts view Dynacor as a unique player in the industry, as it focuses on processing gold sourced from artisanal and small-scale mining, thereby avoiding exploration risks.

Upcoming earnings reports to watch

Investors should keep an eye on the following upcoming earnings reports:

• Jan. 26: Cannara Biotech Inc.
• Jan. 27: AGF Management Ltd.
• Jan. 28: Exco Technologies Limited
• Jan. 29: Real Matters Inc., Coveo Solutions Inc., High Tide Inc., Champion Iron Ltd.
• Feb. 5: Rogers Sugar Inc., Canada Goose Holdings Inc.
• Feb. 9: Silvercorp Inc.