My Top Canadian Stocks to Buy for Outsized Gains in 2024

ByDan Kent Published On:

Key takeaways

Canadian stocks are trading at a discount relative to their US peers, making them attractive options.

The Canadian market is more rate sensitive, which should result in a boost due to falling interest rates.

As fixed income investments fall in yield, the attractiveness of Canadian dividend payers should increase.

3 stocks I like better than the ones on this list.

I love the Canadian stock market. For all its talk about underperformance relative to the US markets, there are some stocks that have absolutely crushed it for many years.

The fact that I can scoop up similar companies at deeply discounted valuations relative to US peers allows me to spend my capital wisely. Many investors are abandoning the Canadian markets and flooding towards the United States as valuations sit at all time highs there, and rock-bottom lows here.

The fact you’re looking at this list today shows you understand that when Canadian stocks get cheap, it’s time to buy, not sell. Lets dig into 12 Canadian stocks I am bullish on moving forward.

As always, if you’re looking for more research, top stock picks, market commentary and more, join our weekly newsletter, absolutely free by clicking here.

What are the best stocks to buy in Canada?

Canada’s largest gold producer
Agnico Eagle Mines

Agnico Eagle Mines (TSE:AEM)

Agnico Eagle is a gold miner with mines in Canada, Mexico, Finland, and Australia. It merged with Kirkland Lake Gold in 2022, acquiring the Detour Lake and Macassa mines in Canada along with the high-grade, low-cost Fosterville mine in Australia. It produced more than 3.4 million gold ounces in 2023 and had about 15 years of gold reserves at end 2023.

Valuation: 27/100

Profitability: 60/100

Outlook: 78/100

Risk: 40/100

Dividend: 74/100

P/E: 71.5

5 Yr Revenue Growth: 25.8%

5 Yr Earnings Growth: 23.7%

5 Yr Dividend Growth: 30.5%

Yield: 1.8%

  • The merger with Kirkland Lake is working out better than anyone expected
  • Rising gold prices due to geopolitical issues along with extensive government debt globally is a large tailwind
  • Exposure to heavily regulated mining industries, which leads to less disruptions in terms of operations
  • Despite a large runup in price, valuations are still very reasonable
  • The company is allocating a lot of capital back to shareholders, including outsized dividend growth
  • Has shown prudence in terms of management in the past, which is a rarity among gold producers
  • Gold prices. This is a fairly obvious one. As the price of gold rises, Agnico stands to benefit from higher realized prices per ounce. As a result, trailing price to earnings ratios are very high, as earnings are expected to grow more in the future
  • Operational efficiencies. Although Agnico has proven time and time again to be a solid operator, one must keep an eye on all-in-sustaining costs
  • Continued merger and acquisition activity. Agnico is generating a large amount of cash flows from rising gold, which could allow it to acquire more companies moving forward
  • Commodity prices. Obviously, the price of gold is the large one. However, Agnico is also exposed to the price of silver, zinc, copper, and other precious metals. No matter how solid operations are, falling commodity prices will generally lead to falling stock prices
  • Input prices. The cost of labor, machinery, fuel, and electricity ultimately impact the margins of a gold producer
  • Market volatility. Commodity stocks tend to be highly volatile, and often move in larger amounts than the underlying commodity it tracks
Canada’s Fastest Growing Big 6 Bank
National Bank stock

National Bank (TSE:NA)

National Bank of Canada is the sixth-largest Canadian bank. The bank offers integrated financial services, primarily in the province of Quebec as well as the city of Toronto. Operational segments include personal and commercial banking, wealth management, and a financial markets group.

Valuation: 57/100

Profitability: 55/100

Outlook: 92/100

Risk: 64/100

Dividend: 98/100

P/E: 12.8

5 Yr Revenue Growth: 7.3%

5 Yr Earnings Growth: 9.6%

5 Yr Dividend Growth: 10.3%

Yield: 3.3%

  • The company is the fastest growing bank out of all the Big 6 options
  • The acquisition of Canadian Western Bank is likely to be accretive to earnings within a year and gives the bank a significant presence in Western Canada
  • Because it is primarily Canadian-based, it is exposed to some of the highest financial regulations, resulting in less uncertainty
  • The highest efficiency level out of all Big 6 banks
  • The company’s current payout ratios signal it should be able to grow the dividend at one of the fastest paces out of all banks
  • Because it is smaller, there are more avenues for growth than the major institutions
  • The Canadian economy. Because this bank has large-scale Canadian exposure, it will not be as sheltered from weakness in the economy as some of the other major institutions with larger geographical diversity
  • Interest rates. Typically, high rates are a good situation for banks. However, the rapid increase in rates put a ton of pressure on the Canadian consumer, impacting the banks
  • Provisions for credit losses. This is capital the bank sets aside due to loans they expect to go unpaid
  • Digital transformation. Because of challenger banks like Equitable Bank and brokerages like Wealthsimple, the banks are having to spend a significant amount of time and money in expanding digital infrastructure to stay competitive
  • Exposure to Quebec. National has the highest exposure to Canada, particularly to Quebec, out of all the major banks. Any economic issues in the country could impact earnings
  • Synergies from the Canadian Western Acquisition. Although the acquisition looks promising at this time, any difficulties in integrating could case a drawdown in the stocks price
  • The health of the Canadian economy. The weaker the Canadian consumer gets, the higher the loan defaults and the larger the impact to earnings because of provisions
  • Competition. Although there is not a lot of competition in terms of the sheer number of banks here in Canada, there is still competition from the other Big 5 Banks plus challenger banks like Equitable and even to an extent Wealthsimple
Canada’s most efficient life insurance company
Sun Life Financial

Sunlife Financial (TSE:SLF)

Sun Life provides life insurance, retirement, and asset management products to individuals and corporate customers in Canada, the United States, and Asia. The company’s investment management business contributes approximately 30% of its adjusted earnings. The Canada provides individual life and health insurance, group insurance, retirement services, and wealth management solutions. The U.S. business is mainly focused on providing group insurance products and managing the in-force life insurance policies. Finally, the Asia segment contributes around 13% of earnings.

Valuation: 62/100

Profitability: 44/100

Outlook: 85/100

Risk: 60/100

Dividend: 91/100

P/E: 14.9

5 Yr Revenue Growth: 7.2%

5 Yr Earnings Growth: 4.9%

5 Yr Dividend Growth: 9.5%

Yield: 4%

  • Life insurance companies are currently benefitting from high rates of interest on their fixed income investments, vaulting earnings
  • The company is very shareholder friendly, increasing the dividend by nearly 10% annually and buying back lots of shares
  • The company has some of the best returns on equity and invested capital out of all life insurers
  • Sunlife has the highest-quality balance sheet out of all the major life insurers in Canada
  • Has some of the largest expected growth rates moving forward
  • Aging population bodes well for life insurance companies
  • Interest rates. Insurers typically benefit from higher policy rates due to higher returns on their fixed income investments. Although lower interest rates aren’t necessarily a large concern, the higher they stay, the more investment income the company will generate
  • Asia expansion. Many life insurance companies are attempting to tape into the Asian markets due to the lack of coverage plus large population
  • Digital innovation. In the online age, the company will need to continually make its products easier to access and customer service at a high level to continue its customer growth
  • Regulatory risks. Because Sunlife is attempting to grow primarily outside of Canada, it is exposed to countries that are not as heavily regulated as Canada. This can impact earnings
  • Competition. The life insurance space is ultra-competitive, which requires constant adaptation of products to make them the most suitable and attractive for customers
  • Market volatility. The company doesn’t just deal with life insurance. It is also a wealth management company and as such volatility in the bond and equity markets can impact returns
Canada’s fastest growing telecom company
Telus dividend

Telus (TSE:T)

Telus is one of the Big Three wireless service providers in Canada, with over 10 million mobile phone subscribers nationwide constituting about 30% of the total market. It is dominant in the western Canadian provinces of British Columbia and Alberta, where it provides internet, television, and landline phone services. It also has a small wireline presence in eastern Quebec. Mostly because of recent acquisitions, more than 20% of Telus’ sales now come from nontelecom businesses, most notably in the international business services, health, security, and agriculture industries.

Valuation: 58/100

Profitability: 45/100

Outlook: 85/100

Risk: 54/100

Dividend: 41/100

P/E: 42.6

5 Yr Revenue Growth: 9.3%

5 Yr Earnings Growth: -15%

5 Yr Dividend Growth: 6.7%

Yield: 6.8%

  • Falling interest rates should fuel increased cash flows and earnings per share
  • The company forms an oligopoly with the other 2 major telecom companies, and it is very hard for new competitors to enter the space
  • The company doesn’t own any media assets unlike Rogers and Bell, which are typically slower growing and hard to make money from
  • Expected to be the fastest growing telecom moving forward due to its tech-based growth verticals
  • Has one of the better covered dividends in the space
  • The company has scaled back capital expenditures and debt issuances at a much better pace than BCE
  • 5G expansion. The telecoms have just finished up a significant round of capital expenditures to expand their 5G infrastructure, which should fuel future growth
  • Telecom competition. Although the space is relatively difficult to enter, many telecoms are now facing stiff competition from each other, with a weaker Canadian consumer causing them to chase cheaper phone plans
  • Telus Digital’s rebound. Telus Digital has been a disastrous IPO for Telus overall, however, there is a likelihood it could rebound during improved economic conditions, which would improve Telus’s bottom line
  • Telus has been expanding its services into rural and underserved areas in Canada. This expansion could be an added growth vertical for the company moving forward
  • Debt levels. Telecom infrastructure is very expensive, leading to high levels of debt. If interest rates decline yet remain high, the costs of this debt will impact the telecoms for the foreseeable future and make infrastructure expansion more difficult
  • Government regulations. This is arguably the largest risk to the telecoms today. Consumers are demanding lower prices, and with the oligopoly that exists right now, government intervention may be the only way to reduce prices
  • Rising material costs. As mentioned, infrastructure spending is needed for these telecoms to grow. In a time of rising material prices, costs of expansion also increase, reducing the overall returns it can generate from these assets
An up and coming small Cap tech company with aI exposure
Hammond Power Logo

Hammond Power Solutions (TSE:HPS.A)

Hammond Power Solutions engages in the design and manufacturing of custom electrical magnetics, cast resin, custom liquid-filled distribution and power transformers, and standard electrical transformers, serving the electrical and electronic industries. The company has manufacturing plants in Canada, the United States, Mexico and India. It derives the majority revenue in the United States and Mexico.

Valuation: 40/100

Profitability: 76/100

Outlook: 100/100

Risk: 70/100

Dividend: 100/100

P/E: 25.3

5 Yr Revenue Growth: 17.7%

5 Yr Earnings Growth: N/A

5 Yr Dividend Growth: 18%

Yield: 0.6%

  • The company is exposed to an industry where infrastructure is growing extensively
  • Artificial intelligence should continue to increase power demand, and thus demand for Hammond’s products
  • The company is still a small-cap stock, with tons of room to grow
  • The company has 25%+ returns on capital and equity, along with double digit growth projections for the future
  • For a small-cap growth stock, the company’s debt situation is solid, and its balance sheet continues to improve
  • Outside of artificial intelligence expansion, the shift to renewable energy should provide tailwinds for the company’s products
  • The overall state of electricity demand globally. The higher demand for energy, ultimately the higher demand for Hammond’s products
  • Industrial automation. As more and more tasks become automated, the demand for electricity should increase
  • Infrastructure spending. As governments continue to have to make improvements to the electricity grid due to a growing population and electric vehicles, there will be a growing need for transformers
  • International expansion. The company right now is primarily a North American player, with tons of room to grow internationally
  • Input costs. The company is heavily exposed to the price of commodities, which will ultimately hit margins if prices accelerate
  • Government and corporate spending. The demand for Hammond’s products relies heavily on governments and companies being willing to lay out capital to expand infrastructure. During downturns, companies could scale back spending, ultimately impacting sales
  • Technological advancements. We’re in an age where technology changes very fast, and as a result traditional style transformers could fall out of favour. The company will need to continually adapt in this regard to stay competitive
Canada’s most Successful technology iPO
a green bag with a white letter

Shopify (TSE:SHOP)

Shopify offers an e-commerce platform primarily to small and medium-size businesses. The firm has two segments. The subscription solutions segment allows Shopify merchants to conduct e-commerce on a variety of platforms, including the company’s website, physical stores, pop-up stores, kiosks, social networks (Meta), and Amazon. The merchant solutions segment offers add-on products for the platform that facilitate e-commerce and include Shopify Payments, Shopify Shipping, and Shopify Capital.

Valuation: 20/100

Profitability: 60/100

Outlook: 100/100

Risk: 18/100

Dividend: N/A

P/E: 86.1

5 Yr Revenue Growth: 46.9%

5 Yr Earnings Growth: N/A

5 Yr Dividend Growth: N/A

Yield: N/A

  • In the new technology age, small businesses are forced to have an online presence. This bodes well for a company like Shopify
  • The company already has a large market share in an industry that is projected to grow at a double-digit pace
  • Company has consistently locked in long-term contracts with major industry players
  • Constant innovation by Shopify is leading more and more businesses to the platform
  • The company is finally profitable, and should continue to increase cash flows moving forward
  • Valuations are still expensive, but nowhere near pandemic levels
  • The health of small and medium sized businesses. An economic boom tends to favor these companies the most, and they’re also the ones most likely to head to Shopify’s platform
  • Capital expenditures towards growth initiatives. A keen eye must be kept on new developments by Shopify in order to bring more customers in, but capital needs to be well spent
  • E-commerce growth. Shopify is solely dependent on the growth of online shopping in order to fuel results. A slowdown or increase in online activity can shift results significantly
  • International expansion. Shopify has a dominant position in North America, but the international markets remain relatively untapped
  • Stiff competition. Subscription level services, especially higher margin ones, results in significantly higher competition. Shopify will consistently need to be on top of its game in order to retain customers
  • Economic slowdowns. We witnessed this in 2022 and 2023. Small businesses are hit hard by recessions, and churn rates are likely to elevate in these types of environments
  • Although valuations are reasonable respective to growth rates, they’re still high. The company will need to keep up its pace of growth or there could be a multiple downgrade given to the company by the market
Canada’s largest sub-prime lender
Goeasy Ltd

Goeasy ltd (TSE:GSY)

goeasy Ltd is a financial services company. The company provides loans and other financial services to consumers and leasing household products to consumers. The easyfinancial segment lends out capital in the form of unsecured and secured consumer loans to nonprime borrowers. easyfinancial’s product offering consists of unsecured and real estate-secured installment loans. The key revenue of the company is generated from easyfinancial.

Valuation: 48/100

Profitability: 69/100

Outlook: 92/100

Risk: 34/100

Dividend: 97/100

P/E: 12.3

5 Yr Revenue Growth: 19.8%

5 Yr Earnings Growth: 32.4%

5 Yr Dividend Growth: 33%

Yield: 2.4%

  • Has survived numerous economic downturns and although there was pricing volatility, came out unscathed
  • The company’s underwriting skills are one of the main reasons it generates the levels of earnings growth it does
  • A cost of living crisis in Canada is causing many more consumers to tap into the sub-prime market in Canada
  • One of the highest returns on shareholder equity in the financial sector
  • Its diversification into the automobile sector is providing continual tailwinds
  • The company is the go-to brand for many consumers seeking alternative lending products in Canada
  • The state of the Canadian economy. Alternative lenders tend to thrive during weaker economies as more consumers are looking to tap into the sub-prime market as times get tough
  • Government regulations. More and more governments are cracking down on alternative lenders in what they view are predatory lending practices
  • Its easyhome segment. This is a segment of the business that is likely only to grow during an economic boom, as most of the items it finances are discretionary in nature
  • The company’s charge-off rate. This is arguably one of the most important key performance indicators from goeasy
  • Regulatory concerns. I would say this is the largest risk to goeasy by quite a large margin. Governments forced alternative lenders to scale back their average APRs on their loans in 2023. Although this didn’t impact goeasy that much because of its current loan portfolio, newer restrictions would hit the company hard
  • A deep recession. As I mentioned, alternative lenders thrive when the economy is poor. But there is a fine line here, if becomes too weak, defaults will rise and earnings will be impacted
  • An economic boom. It is likely once Canadians have more access to disposable capital, they will look to utilize the services of a company like goeasy less
  • Competition. Although goeasy is a well known brand here in Canada, US players like Propel holdings could continue to expand in the Canadian space
North America’s Leading Logistics Company
TFI International

TFI International (TSE:TFII)

TFI is a transportation and logistics company. The company has four segments: package and courier, less-than-truckload, truckload, and logistics. The package and courier segment picks up, transports, and delivers items across North America. The less-than-truckload segment transports smaller loads. The truckload segment transports goods by flatbed trucks, containers, or a more specialized service. The company provides general logistics services through the logistics segment. TFI International derives the majority of its revenue domestically, followed by the United States.

Valuation: 50/100

Profitability: 35/100

Outlook: 92/100

Risk: 68/100

Dividend: 95/100

P/E: 25.3

5 Yr Revenue Growth: 15.8%

5 Yr Earnings Growth: 20.6%

5 Yr Dividend Growth: 18%

Yield: 1.1%

  • Has proven multiple times (2008, 2020) that it can operate efficiently in any economic environment
  • The company’s cash flow generation allows it to acquire discounted trucking operations, integrate them into the fold, improve margins and compound cash flow growth
  • The rising growth of e-commerce will be a permanent tailwind on much of its operations moving forward, as more packages will need to be shipped
  • Some of the best margins out of all logistics companies in North America
  • Although low-yielding, the company is one of the best dividend growers in the country
  • One of the stronger management teams in the country, leading to high returns on invested capital and consistent double digit earnings growth
  • The state of the US and Canadian economy. TFI International is cyclical. This means it will generate produce strong results during a booming economy, but will struggle during a weaker one due to lower freight demand
  • The company’s operating ratio. This highlights how much operating expenses the company has to spend to generate its revenue. The lower the operating ratio, the better
  • E-commerce growth. Amplified growth in this space will likely lead to tailwinds for TFI, as it is already positioned as one of the more dominant logistics companies in North America
  • Fuel prices and other input costs. Although TFI mitigates these with fuel surcharges, rapidly changing fuel prices can no doubt impact results
  • Competition. Make no mistake about it, this industry is highly competitive. TFI has a dominant position right now, but other trucking companies can easily come in and offer competitive freight prices to take market share away
  • Acquisition integrations. Although TFI International has done very well in the past acquiring companies, there is no guarantee it will continue to do so. It only takes a few poor acquisitions to impact results
  • Regulatory issues. As we move towards a greener economy, there is always the chance governments can step in and force companies to abide by stricter emissions protocols, which could impact margins
  • Economic activity. With TFI being a cyclical stock, there is always the chance a deep recession could hit the company hard
Canada’s Largest Discount Grocery Company
Loblaws

Loblaw (TSE:l)

Loblaw is Canada’s largest retailer, operating 2,460 food retail and pharmacy stores across the country. Its main grocery banners include Loblaw, No Frills, and Maxi, and its pharmacy stores are mostly under the Shoppers Drug Mart banner, which it acquired in 2014. In addition to brand-name offerings, Loblaw offers private-label products under the President’s Choice and No Name brands. Beyond retail, Loblaw runs the PC Optimum loyalty program and also offers credit cards and insurance brokerage, which are collectively referred to as financial services.

Valuation: 45/100

Profitability: 62/100

Outlook: 85/100

Risk: 100/100

Dividend: 84/100

P/E: 26.8

5 Yr Revenue Growth: 5%

5 Yr Earnings Growth: 26.8%

5 Yr Dividend Growth: 8.6%

Yield: 1.1%

  • Food inflation changed the way Canadian consumers shop, likely permanently. Because Loblaw has such a large amount of discount banners, this will fuel results
  • The widest moat out of any Canadian grocer. Every Canadian is on average 10km away from a store
  • Excess cash flow generation will allow it to reinvest back into the business & expand infrastructure
  • Consistently outpaces the other major grocery companies in terms of same store sales and earnings growth
  • The company’s business model is efficient regardless of the economic situation, which ultimately leads to less surprises in terms of earnings
  • The company’s pharmacy segment of the business should continue to provide additional earnings growth tailwinds
  • The health of the Canadian consumer. Food inflation has settled, but prices are not coming down anytime soon. The weaker the Canadian consumer, the more likely they are to head to a discount brand grocery store
  • Infrastructure expansion. Because of Loblaw’s large cash flow generation, it should be able to expand at a faster pace than its competitors, plus integrate more energy efficient applications inside stores to boost margins
  • The development of discount brands from competitors who are catching on to the growing trend of Canadian consumers refusing to pay high costs for food
  • Reputation is a big thing in the space. Loblaw has been the face of many grocery boycotts here in Canada and has even been caught working with other grocers to fix prices on particular items. Although these haven’t had a material impact on sales, they could in the future
  • Government regulations. Because of the cost of living crisis here in Canada, governments may be looking to set profit capping regulations on the grocery companies in an attempt to give some relief to the consumer
  • Margins. These grocery companies operate on razor-thin margins and rely solely on volume to push out profits. Large missteps in the business can result in a decline in margins and significantly impact cash flow
  • Competition. Although Loblaw’s discount presence is dominant right now, other grocery stores are catching on to this trend and developing more stores of their own. Loblaw will need to continually adapt to stay on top of competition
Canada’s Best Discount Store Operator
Dollarama

Dollarama (TSE:DOL)

Dollarama operates discount retail stores. The company provides a broad range of everyday consumer products, general merchandise, and seasonal items both in-store and online. General merchandise and consumer products account for the majority of the company’s product offerings. The company’s stores are throughout Canada, generally located in metropolitan areas, midsize cities, and small towns. All the stores are owned and operated by the company.

Valuation: 28/100

Profitability: 85/100

Outlook: 92/100

Risk: 87/100

Dividend: 92/100

P/E: 37.5

5 Yr Revenue Growth: 10.6%

5 Yr Earnings Growth: 16.5%

5 Yr Dividend Growth: 12.1%

Yield: 0.2%

  • Cost of living crisis is causing many Canadians to change their shopping habits permanently
  • The company operates a lean inventory model, carrying less products, which ultimately results in higher inventory turnover and larger margins
  • The company generates significantly more free cash flow than its competition on a fraction of the revenue
  • The company has proven it can operate profitable businesses even in Canada’s smallest towns, leaving much more room for expansion
  • Although valuations are high, they certainly aren’t unreasonable
  • International expansion gives it a lot more runway outside of Canada
  • Inflation and the health of the Canadian consumer. If discretionary spending increases, it may lose customers to higher value stores
  • Manufacturing costs in China. The company sells items that are primarily manufactured in China
  • E-commerce trends. Although Dollarama offers cheaper products, convenience is a human element as well.
  • Advancements in supply chains. With most of its products being outsourced from international countries, improving supply chains can boost earnings
  • The company outsources a lot of its products from China. Sanctions, global conflicts, and rising costs of production in the country could materially impact the company’s operations
  • Rising labor costs. More and more Canadians are refusing to do work at minimum wages. This could put pressure on the company’s ability to staff its stores unless it pays more
  • Competition for discount items is fierce. Although Dollarama hasn’t been disrupted by a major player yet, there is no guarantee it won’t be in the future
  • A weaker Canadian dollar can increase the cost of imported goods, impacting profitability
Canada’s Most Cost Efficient Oil Producer

Canadian Natural Resources (TSE:CNQ)

Canadian Natural Resources Ltd is an independent crude oil and natural gas exploration, development, and production company. The Company’s exploration and production operations are focused in North America, largely in Western Canada; the United Kingdom (UK) portion of the North Sea, and Cote d’Ivoire and South Africa in Offshore Africa. The Company’s exploration and production activities are conducted in three geographic segments: North America, the North Sea, and Offshore Africa.

Valuation: 50/100

Profitability: 78/100

Outlook: 64/100

Risk: 58/100

Dividend: 100/100

P/E: 13.7

5 Yr Revenue Growth: 12%

5 Yr Earnings Growth: 27.6%

5 Yr Dividend Growth: 21.5%

Yield: 4.3%

  • One of the lowest cost producers out of all major Canadian oil producers
  • The company showed during the pandemic it can navigate virtually any oil environment and continue to raise dividends
  • Company allocates 100% of its free cash flow back to shareholders when debt is below $10B
  • Mergers and acquisitions are expected to be extensive due to strong cash flow generation and discounted industry valuations
  • 20% CAGR on its dividend over its 25 year dividend growth streak
  • Exposure to multiple commodities, which should help to reduce volatility based on individual commodity pricing
  • Regulations in Canada, primarily focused on the Alberta oil sands
  • Debt levels of the company, as increased debt could change FCF return policy
  • Global oil demand and oil pricing. No matter how good operations are, lower oil likely means lower share prices for CNQ
  • OPEC decisions, as they often cause significant shifts in the supply and demand dynamics.
  • Commodity sensitivity. The company’s cyclical nature will have it outperforming during times of high prices and vice versa
  • Energy transition. As renewables continue to increase in popularity, the demand for oil and gas is expected to peak in the next decade
  • Currency fluctuations. CNQ has a lot of exposure to the USD. Large swings in currency can impact earnings
  • Lack of investor interest. The oil and gas industry is notorious for lackluster investments. This can lead to persistently low valuations
Canada’s Most Powerful Brand

Royal Bank of Canada (TSE:RY)

Royal Bank is a global enterprise with operations in Canada, the United States, and, as you’ll see the importance of later, 40 other countries. When it comes to international banking, there isn’t a bank with more exposure.

Valuation: 51/100

Profitability: 50/100

Outlook: 92/100

Risk: 82/100

Dividend: 92/100

P/E: 15.4

5 Yr Revenue Growth: 5.8%

5 Yr Earnings Growth: 4.7%

5 Yr Dividend Growth: 7.2%

Yield: 3.2%

  • Company’s global exposure diversifies it away from its heavy Canadian operations
  • The company’s payout ratio is among the best of the Big 6 banks, which should allow it to grow the dividend at the fastest pace
  • One of the best underwriting teams out of all the major institutions
  • The largest expected growth rates out of any Canadian bank
  • The company’s strong brand and reputation continues to drive client growth
  • Although valuations are high, the company’s results in harsh economic climates make it worth the price
  • The health of the Canadian economy
  • Mortgage renewals in a post-pandemic rate environment
  • Provisions for credit losses
  • Deposit activity relative to challenger banks
  • Loss of brand power due to poor customer service
  • Challenger banks stealing retail clients
  • High valuations leading to lower margin of safety
  • Regulatory issues in foreign countries