Make America Great Again Hat Overlay

Equally someone who lives and breathes the Canadian fashion of life, I oft get called on by InvestorPlace to write nearly Canadian stocks to buy.

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

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

As professor Richard Leblanc notes, "There really isn't an industry that's immune from what happens south of the edge . What goes on, goes correct to the top very quickly." Leblanc teaches governance, law and ethics at York University in Toronto.

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

So, for this commodity, I'm recommending seven Canadian stocks that generate a pregnant amount of their revenue in the Usa. As the headline reads, each ane could exist considered the plumage in America'due south hat.

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

Canadian Stocks to Buy: Lululemon (LULU)

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I remember when I beginning recommended this apparel brand back in Baronial of 2016. I called LULU stock a top l S&P 500 investment over the next decade. The merely trouble was it wasn't part of the index — and still isn't.

At the time, Lululemon'due south sales in the U.S. accounted for over 60% of its financial 2015 revenue of $$2.i billion (Page 61). In the company'due south fiscal year 2019, U.South. sales deemed for over 71% of its $4 billion in almanac revenue.

Despite an increase in the pct of sales generated in the U.S. over these 4 fiscal years, the company also did an excellent job of growing sales in its home marketplace of Canada and overseas.

Every bit large a deal as this pick of the Canadian stocks was four years agone, information technology's an even bigger deal today.

On Dec. x, it reported Q3 2020 sales that grew 22% year-over-year (YOY), despite a serious downturn in walk-in traffic due to Covid-xix. CNBC reports that Neil Saunders, the Retail Managing director at GlobalData, said, "While a V-shaped recovery may not be materializing for virtually of clothes retail, Lululemon has bounced back from the weak start to its year with a stunning set of 3rd-quarter numbers […] Our data also prove that Lululemon has picked up plenty of new shoppers, especially in womenswear."

Then, when it comes to retail, Lululemon is one of the best stocks to ain — and it but happens to be run out of Vancouver.

Shopify (Store)

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Given the returns of tech stocks in 2020, Shopify's performance — a year-to-date (YTD) full return of 195% through Dec. 18 — seems well-nigh pedestrian.

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

Equally InvestorPlace's Faisal Humayun stated recently, Shopify is crushing it .

"From a financial perspective, the company reported cash and equivalents of $vi.one billion [equally of the stop of September]," Humayun wrote on Dec. 14. He added, "In addition, with improving operating leverage, I look operating cash flows increase in the coming years. This will allow the company to go on aggressive investments in growth and research and evolution."

The last time I covered Store on a single-stock basis was in April, when it traded effectually $525. At the time, I wondered if the stock would exist heading to $650 or back to $350 , where it traded during the March correction.

I concluded that if yous were holding Shopify stock for the long haul — say 2-3 years — ownership in the $500s wasn't a bad 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 once more. However, solid returns definitely appear to be in the cards for this i of the Canadian stocks, given its business model's undeniable strength.

BRP (DOOO)

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BRP stands for Bombardier Recreational Products, but y'all 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 also grown to become a big seller of all-terrain vehicles (ATVs) and side-by-side vehicles (SSVs).

In the tertiary quarter ended October. 31, BRP had sales of over one.67 billion CAD (over $1.31 billion), one.9% college than in the aforementioned quarter a yr earlier. Nevertheless, on the bottom line, information technology had operating profits of 284.3 million CAD (about $223 million), near 37% higher YOY.

Equally a event of a more profitable sales mix in financial 2021, the company is expected to grow its normalized earnings per share (EPS) by nigh 37% this year, despite an overall one.4% decline in sales. Consumers are paying peak dollar for its year-round products (ATVs, SSVs) and that's showing up on the income statement.

In November 2018, I recommended investors buy Po laris (NYSE: PII ), BRP's biggest rival . Right now, it's up marginally over the two-twelvemonth menstruation. At the same time, DOOO stock is up 177% over the aforementioned menses.

As information technology continues to gain global market place share, I expect BRP to keep delivering potent double-digit returns for shareholders in 2021, earning its place on this list of the best Canadian stocks.

Enbridge (ENB)

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In 2019, Enbridge generated xxx.ane billion CAD ($23.half-dozen billion) in the United States, bookkeeping for roughly 60% of its overall revenues (Page 120). In the by ii fiscal years, ENB's sales in Canada have grown by 10.iv%. South of the border, notwithstanding, they grew by a more robust fourteen.4% over the aforementioned period. While that might not seem like a big departure, when you're talking about over 50 billion CAD in annual revenue, it's noticeable.

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

On Dec. 8, the visitor 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 3.95 billion CAD ($3.1 billion) in free cash menstruation over the by 12 months and growing at a healthy clip, ENB stock has plenty of cash to brand the annual payments.

Its total render YTD is -sixteen%. Equally long as the oil and gas industry continues to sputter, Enbridge might experience the same result in 2021. However, with the company expected to begin structure on the Line 3 pipeline project in Minnesota in the twelvemonth alee, Enbridge'south growth plans are starting to await up.

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

Toronto-Dominion Depository financial institution (TD)

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It'south non been a good year for most Canadian banks, although Toronto-Dominion's most contempo quarterly results advise the pandemic's wrath may be coming to an end. Recently, TD stock has come on in contempo months, gaining over 18% in the past three months lonely.

The bank reported its Q4 results on Dec. 3. On an adapted basis, TD earned ii.97 billion CAD (over $2.32 billion) in net income, slightly higher than the 2.95 billion CAD ($2.31 billion) information technology fabricated a year earlier. For the unabridged year, information technology earned 9.97 billion CAD (roughly $7.8 billion), a footling more than than 20% lower than the year before.

What'south more than, Toronto-Rule'south U.S. retail banking business accounted for roughly 30% of its overall net income during the 4th quarter, raking in 871 million CAD ($658 meg). Unfortunately, it was 27% lower than a year earlier. Nevertheless, its Canadian retail cyberbanking was 3% higher YOY.

The most important figure in the bank's Q4 report, though, was the steep drop in its provision for credit losses, which fell to 971 1000000 CAD ($760 million) from 2.19 billion CAD ($1.72 billion) at the end of the third quarter catastrophe on July 31 (Folio 7).

Also, on a positive notation, analysts expected TD to earn $1.27 during the quarter. It shell that approximate past 33 cents.

Once the U.S. economy returns to normal, Toronto-Dominion's U.Southward. retail business ought to make a bigger contribution to the bank's bottom line. And, let'south non forget that the bank also owns 13.5% of Charles Schwab (NYSE: SCHW ).

In the meantime, enjoy its iv.three% 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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Next on my list of some of the all-time Canadian stocks is TRI stock. In a challenging operating environment, Thomson Reuters reported splendid Q3 results on November. 3.

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

In fiscal 2019, Thomson Reuters generated 79% of its $5.9 billion in revenue in the United States. And so, fifty-fifty though TRI is controlled past Canada'south richest family — the Thomsons, who own 66% of the visitor'south stock — much of the visitor'due south wealth has been earned in the U.Southward.

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

While I don't recall you're going to hitting a homerun owning TRI stock the same way yous will with Shopify, you can't go wrong with this name if preservation of capital is of import to you.

FirstService (FSV)

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Final on my list of Canadian stocks is FirstService, a leader in outsourced belongings services in North America. It's definitely the smallest of the vii stocks listed in this article. But what it lacks in company size, it makes up for in outsized shareholder returns. So far in 2020, information technology'due south having a not bad yr with a full return of over 41% YTD.

FSV is divided into 2 operating segments : FirstService Residential, which manages residential communities, and FirstService Brands, a provider of "essential belongings services" like painting, holding damage restoration, flooring, closets and home inspections.

In the trailing 12 months concluded Sep. 30, FSV had $2.67 billion in sales, ninety% of which was generated in the United States. The remainder was made in its home base of Canada. Employing approximately 24,000 people, information technology had abaft 12-months adjusted EBITDA of $268 million, roughly 10% of its top-line sales.

In 1995, the visitor had $37 million in acquirement. Some 24 years later in 2019, revenue was $two.41 billion. That makes for a compound annual growth rate of 19% (Page 5).

You tin can't go wrong with businesses that make or save customers fourth dimension and coin. FirstService does both. It's an excellent long-term purchase.

On the date of publication, Volition Ashworth did not take (either directly or indirectly) any positions in the securities mentioned in this article.

Will Ashworth has written about investments full-time 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 especially enjoys creating model portfolios that stand the exam 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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