Many investors struggle because they follow too many stocks… not to mention the “wrong” stocks. Then, once they’ve made their selections, they use emotion, news, or some other subjective guide for when to purchase or sell the stocks. Does that sound familiar?
Here at Invest in the Markets, we use reliable, proven strategies to help us make our selections… and guide our timing to protect our capital and maximize our returns. Keep checking back as I expand this list to the top 10 Canadian Stocks shortly!
#1 - Dollarama (DOL.TO)
In the US, companies like DollarTree continue to be leaders, whether in good or poor market conditions. In Canada, Dollarama fits the bill. With over 680 stores in all 10 Provinces, Dollarama is Canada’s dollar store leader. Dollarama has a 2.73 Billion dollar market cap, a 1% dividend yield, and a health 17% Return on Equity (ROE). Interestingly, they are larger than their 5 closest competitors combined.
Dollarama has done well to service clients with value at minimal prices which keeps them coming back to spend their Loonies and Toonies. In addition to items for everyday use, Dollarama capitalizes on seasonal items, including a large assortment of items related to various celebrations such as Valentines Day, Easter, Halloween, and Christmas among others. With continued expansion and growth in both good and less than good times, Dollarama is a stock I give my dollars to.
#2 - Tourmaline (TOU.TO)
Tourmaline Oil Corp. of Calgary recently reported an 82% increase in production and and a 93% increase in revenue in the three months ended September 30. Growing through both acquisitions and the drill bit, Tourmaline is led by the experience of Michael Rose, the former CEO of DuvernayOil Corp. which sold for a healthy profit. Tourmaline, in my opinion, is positioning itself to do the same in future years.
Tourmaline is a Canadian intermediate crude oil and natural gas exploration and production company. Positioned well with a large land position, Tourmaline has increasing institutional investment, meaning the professionals are putting their money behind this leadership team and company. Watch for this company to continue to grow its revenues and share price in years to come.
#3 - Silver Wheaton (SLW.TO)
Silver Wheaton is a young, strategic company in the Precious Metals and Mining industry with a twist… ”The company currently has fourteen silver purchase agreements and two precious metals agreements where, in exchange for an upfront payment, it has the right to purchase all or a portion of the silver production, at a low fixed cost, from high-quality mines located in politically stable regions.” Established in 2004, this company is poised to expand rapidly, as it has been doing so, in the the upcoming years.
Silver Wheaton has minimal debt (below 5%), a small dividend of 0.32% which only began in March 2011, and a market cap of 12.9 Billion. But the numbers that really impress are it’s 3 year sales growth rate of 56%, it’s 14.5% plus Return on Equity (ROE), and it’s increasing fund ownership as more institutional investors continue to recognize and buy this expanding company. For a “conservative” company profile, it’s a great way to invest in this sector without taking an unnecessary gamble.
#4 - Canadian National Railway (CNR.TO)
Did you know railway stocks are the oldest stocks listed in the exchange networks? Early in the DOW, railway stocks dominated the market. Today, railway stocks, although not as dominant in the stock exchanges, still have a dominant role as virtual monopolies. With the extremely high upstart costs, the existing railroad companies run a near monopoly on their routes. With increasing costs of transportation and railroads remaining one of the cheapest continental methods of transportation of goods, railways are positioned to continue to do well in struggling and expanding domestic markets.
Canadian National Railway (CNR.TO) is a slight departure from my usual “picks.” But when you examine the history, their unique place in the transportation sector and their specific numbers, you’ll see why CNR makes the list. CNR operates approximately 20,500 route miles in North America, with the ability to move approximately one tonne of goods 500 miles for a single gallon of fuel. With gross margins over 35%, a 14% EPS growth story, a 20% Return on Equity, and a small divided yield of approximately 1.7%, this company has a little bit for everyone.
#5 - Toronto Dominion Bank (TD.TO)
Rounding out the Canadian Top 5 with a Canadian Bank shouldn’t be a surprise to anyone. After all, the TSX is driven by resources and financial institutions like Toronto Canadian Bank (TD.TO). But, before you think this choice simply applies to the TSX, take a look at how TD is expanding internationally in a very strategic fashion. With over 19 Million customers world-wide, TD bank is making inroads in stable and receptive settings. Even Jim Cramer referred to it recently as a bank to mimic.
It’s not every day a large bank like TD that brags a 13.5% Return on Equity and a 3.6% dividend can continue to grow at 15% plus levels, especially when banks across the world are being slaughtered by the markets. Yet, TD stands out as a model… a demonstrating of responsible growth and expansion.
