Make America Great Again Hat Font

As someone who lives and breathes the Canadian style of life, I often become called on past InvestorPlace to write about Canadian stocks to purchase.

Some obvious names that trade on the New York Stock Exchange or the Nasdaq come to mind. Many of them depend on America for much of their livelihood. It'south why the latest U.S. election bicycle has been mesmerizing television for Canadian business executives.

In November, CEOs across Canada and those operating from inside the U.S. were definitely sweating the details. Afterwards all, when the U.S. sneezes, Canada catches a cold.

As professor Richard Leblanc notes, "There really isn't an industry that's allowed from what happens s of the border . What goes on, goes right to the top very quickly." Leblanc teaches governance, police and ethics at York Academy in Toronto.

Well, Joe Biden won and Donald Trump lost. Canada volition at present become set up to come across how the human relationship shifts — and information technology always does after a change in presidents.

So, for this commodity, I'yard recommending seven Canadian stocks that generate a significant amount of their revenue in the U.s.a.. Every bit the headline reads, each one could be considered the plume in America's chapeau.

• Lululemon (NASDAQ: LULU )
• Shopify (NYSE: Shop )
• BRP (NASDAQ: DOOO )
• Enbridge (NYSE: ENB )
• Toront0-Dominion (NYSE: TD )
• Thomson Reuters (NYSE: TRI )
• FirstService (NASDAQ: FSV )

Canadian Stocks to Buy: Lululemon (LULU)

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I call back when I kickoff recommended this apparel brand back in August of 2016. I called LULU stock a top fifty S&P 500 investment over the next decade. The only trouble was it wasn't part of the index — and yet isn't.

At the time, Lululemon's sales in the U.S. deemed for over 60% of its financial 2015 revenue of $$2.1 billion (Page 61). In the company's financial yr 2019, U.S. sales accounted for over 71% of its $4 billion in annual revenue.

Despite an increase in the percentage of sales generated in the U.S. over these four fiscal years, the company too did an excellent job of growing sales in its domicile market of Canada and overseas.

Equally big a bargain equally this selection of the Canadian stocks was 4 years ago, it'southward an even bigger deal today.

On Dec. ten, it reported Q3 2020 sales that grew 22% year-over-twelvemonth (YOY), despite a serious downturn in walk-in traffic due to Covid-19. CNBC reports that Neil Saunders, the Retail Managing Director at GlobalData, said, "While a V-shaped recovery may not be materializing for most of apparel retail, Lululemon has bounced back from the weak outset to its year with a stunning set up of third-quarter numbers […] Our data also evidence that Lululemon has picked upwardly enough of new shoppers, specially in womenswear."

So, when it comes to retail, Lululemon is i of the best stocks to own — and information technology just happens to be run out of Vancouver.

Shopify (Shop)

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Given the returns of tech stocks in 2020, Shopify's functioning — a year-to-date (YTD) total return of 195% through Dec. xviii — seems almost pedestrian.

The reality is, though, that SHOP stock is having a skillful twelvemonth and (barring some major change in consumer shopping habits) the company's e-commerce platform will remain in demand for companies of all sizes.

As InvestorPlace'southward Faisal Humayun stated recently, Shopify is crushing it .

"From a financial perspective, the company reported cash and equivalents of $half-dozen.1 billion [as of the end of September]," Humayun wrote on Dec. 14. He added, "In addition, with improving operating leverage, I expect operating cash flows increase in the coming years. This will allow the visitor to continue ambitious investments in growth and research and development."

The last time I covered SHOP on a single-stock basis was in Apr, when it traded around $525. At the time, I wondered if the stock would be heading to $650 or back to $350 , where information technology traded during the March correction.

I ended that if yous were holding Shopify stock for the long haul — say 2-3 years — buying in the $500s wasn't a bad phone call. At present, it has doubled from April prices to over $1,170 per share.

Heading into 2021, I don't know if SHOP will double again. However, solid returns definitely appear to be in the cards for this one of the Canadian stocks, given its business organization model's undeniable force.

BRP (DOOO)

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BRP stands for Bombardier Recreational Products, but you probably better know its brands — Ski-Doo, Lynx, Sea-Doo, Can-Am, Alumacraft boats and more. While the company's heritage is in snowmobiles, it has too grown to become a big seller of all-terrain vehicles (ATVs) and side-by-side vehicles (SSVs).

In the third quarter concluded Oct. 31, BRP had sales of over i.67 billion CAD (over $1.31 billion), 1.nine% higher than in the same quarter a year earlier. However, on the bottom line, it had operating profits of 284.3 million CAD (about $223 1000000), nearly 37% higher YOY.

As a event of a more profitable sales mix in fiscal 2021, the company is expected to grow its normalized earnings per share (EPS) past about 37% this year, despite an overall 1.four% reject in sales. Consumers are paying summit dollar for its year-round products (ATVs, SSVs) and that'due south showing up on the income argument.

In November 2018, I recommended investors purchase Po laris (NYSE: PII ), BRP's biggest rival . Right at present, information technology's upwardly marginally over the two-twelvemonth period. At the same time, DOOO stock is up 177% over the aforementioned catamenia.

As it continues to proceeds global market share, I await BRP to keep delivering stiff double-digit returns for shareholders in 2021, earning its place on this listing of the all-time Canadian stocks.

Enbridge (ENB)

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In 2019, Enbridge generated 30.1 billion CAD ($23.6 billion) in the U.s.a., bookkeeping for roughly threescore% of its overall revenues (Page 120). In the past ii fiscal years, ENB'southward sales in Canada have grown by ten.4%. Due south of the border, however, they grew past a more than robust 14.4% over the aforementioned period. While that might non seem like a big difference, when you're talking about over 50 billion CAD in annual revenue, it'southward noticeable.

Now, well-nigh of the Canadian stocks on this listing are growth-oriented stocks. But Enbridge — whose energy infrastructure helps keep North America running — is a combination of value, growth and income.

On Dec. 8, the company declared a 3% increase in its quarterly dividend to 83.5 cents CAD. The annualized dividend rate of 3.34 CAD yields a very healthy 7.8%. Plus, with iii.95 billion CAD ($iii.i billion) in gratuitous cash flow over the past 12 months and growing at a healthy prune, ENB stock has plenty of cash to make the annual payments.

Its total return YTD is -xvi%. Every bit long every bit the oil and gas industry continues to sputter, Enbridge might experience the same issue in 2021. However, with the company expected to brainstorm structure on the Line 3 pipeline project in Minnesota in the yr ahead, Enbridge's growth plans are starting to look up.

So, become paid by waiting on Enbridge to inevitably grow its business organization south of the border.

Toronto-Dominion Banking company (TD)

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Information technology's non been a good year for virtually Canadian banks, although Toronto-Rule'due south most recent quarterly results suggest the pandemic's wrath may be coming to an end. Recently, TD stock has come up on in recent months, gaining over 18% in the past three months alone.

The bank reported its Q4 results on December. three. On an adjusted footing, TD earned ii.97 billion CAD (over $2.32 billion) in cyberspace income, slightly college than the 2.95 billion CAD ($2.31 billion) information technology fabricated a year earlier. For the unabridged twelvemonth, it earned 9.97 billion CAD (roughly $7.8 billion), a trivial more than 20% lower than the yr before.

What's more, Toronto-Rule's U.Southward. retail banking business accounted for roughly 30% of its overall net income during the fourth quarter, raking in 871 1000000 CAD ($658 1000000). Unfortunately, it was 27% lower than a twelvemonth earlier. However, its Canadian retail banking was three% higher YOY.

The most of import effigy in the bank'due south Q4 written report, though, was the steep drib in its provision for credit losses, which fell to 971 1000000 CAD ($760 meg) from 2.xix billion CAD ($1.72 billion) at the end of the third quarter ending on July 31 (Folio 7).

Likewise, on a positive note, analysts expected TD to earn $1.27 during the quarter. Information technology vanquish that approximate by 33 cents.

Once the U.Southward. economic system returns to normal, Toronto-Rule's U.S. retail business ought to brand a bigger contribution to the banking company's bottom line. And, let's non forget that the bank also owns xiii.5% of Charles Schwab (NYSE: SCHW ).

In the meantime, enjoy its 4.3% dividend yield. Out of all of the Canadian stocks on the market, TD is definitely a solid pick.

Thomson Reuters (TRI)

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Side by side on my listing of some of the best Canadian stocks is TRI stock. In a challenging operating environment, Thomson Reuters reported first-class Q3 results on November. 3.

On the top line, sales grew by 2% during the quarter to $1.44 billion — and 3% if yous exclude currency. On the bottom line, information technology earned 39 cents a share, 44% higher than a yr earlier and 48% college if you exclude currency.

In financial 2019, Thomson Reuters generated 79% of its $5.9 billion in acquirement in the United States. So, even though TRI is controlled past Canada's richest family — the Thomsons, who ain 66% of the company'due south stock — much of the company's wealth has been earned in the U.S.

Recently, Thomson Reuters also completed a large-scale migration of its business information services to AWS, Amazon's (NASDAQ: AMZN ) cloud-computing service. The company'due south digital transformation will enable it to go a more agile business in the futurity. As part of the migration, it moved thousands of servers to AWS.

While I don't recollect yous're going to hit a homerun owning TRI stock the same way you will with Shopify, you can't become incorrect with this name if preservation of upper-case letter is of import to yous.

FirstService (FSV)

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Concluding on my listing of Canadian stocks is FirstService, a leader in outsourced holding services in Due north America. It'due south definitely the smallest of the vii stocks listed in this article. But what it lacks in company size, information technology makes up for in outsized shareholder returns. And so far in 2020, it's having a smashing yr with a total return of over 41% YTD.

FSV is divided into ii operating segments : FirstService Residential, which manages residential communities, and FirstService Brands, a provider of "essential belongings services" like painting, property damage restoration, flooring, closets and home inspections.

In the trailing 12 months ended Sep. 30, FSV had $2.67 billion in sales, 90% of which was generated in the United States. The rest was made in its home base of Canada. Employing approximately 24,000 people, it had trailing 12-months adapted EBITDA of $268 1000000, roughly 10% of its top-line sales.

In 1995, the visitor had $37 million in revenue. Some 24 years later in 2019, revenue was $2.41 billion. That makes for a compound annual growth rate of 19% (Page 5).

Y'all can't go wrong with businesses that make or salve customers time and coin. FirstService does both. It's an first-class long-term purchase.

On the engagement of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article.

Will Ashworth has written almost investments full-fourth dimension since 2008. Publications where he's appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the examination of time. He lives in Halifax, Nova Scotia.

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Source: https://investorplace.com/2020/12/7-canadian-stocks-that-are-the-feather-in-americas-hat/

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