Russian Make America Great Again Hat

As someone who lives and breathes the Canadian mode of life, I oft become called on by InvestorPlace to write about Canadian stocks to buy.

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 cycle has been mesmerizing television for Canadian business executives.

In November, CEOs beyond Canada and those operating from within the U.Due south. were definitely sweating the details. After all, when the U.Due south. sneezes, Canada catches a common cold.

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

Well, Joe Biden won and Donald Trump lost. Canada will at present get set to see how the relationship shifts — and information technology always does afterward a alter in presidents.

And so, for this commodity, I'm recommending vii Canadian stocks that generate a meaning amount of their revenue in the United States. As the headline reads, each one could be considered the feather in America's lid.

• 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 remember when I start recommended this apparel brand dorsum in August of 2016. I chosen LULU stock a pinnacle l S&P 500 investment over the next decade. The only problem was it wasn't part of the index — and still isn't.

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

Despite an increase in the percentage of sales generated in the U.S. over these 4 fiscal years, the company also did an first-class chore of growing sales in its dwelling market of Canada and overseas.

As big a deal as this pick of the Canadian stocks was iv years agone, information technology'due south an even bigger bargain today.

On Dec. 10, it reported Q3 2020 sales that grew 22% year-over-year (YOY), despite a serious downturn in walk-in traffic due to Covid-19. CNBC reports that Neil Saunders, the Retail Managing Managing director at GlobalData, said, "While a V-shaped recovery may not be materializing for most of wearing apparel retail, Lululemon has bounced back from the weak start to its year with a stunning gear up of third-quarter numbers […] Our information besides testify that Lululemon has picked upward plenty of new shoppers, especially in womenswear."

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

Shopify (SHOP)

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Given the returns of tech stocks in 2020, Shopify's operation — a year-to-date (YTD) total render of 195% through Dec. xviii — seems near 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 volition remain in need for companies of all sizes.

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

"From a financial perspective, the company reported cash and equivalents of $half dozen.one billion [every bit of the finish of September]," Humayun wrote on December. 14. He added, "In addition, with improving operating leverage, I wait operating cash flows increment in the coming years. This will permit the company to continue aggressive investments in growth and enquiry and development."

The last fourth dimension I covered Shop on a unmarried-stock basis was in April, when it traded around $525. At the time, I wondered if the stock would be heading to $650 or dorsum to $350 , where it traded during the March correction.

I concluded that if you were holding Shopify stock for the long haul — say 2-3 years — ownership in the $500s wasn't a bad call. Now, information technology has doubled from April prices to over $1,170 per share.

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

BRP (DOOO)

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BRP stands for Bombardier Recreational Products, simply you probably amend know its brands — Ski-Doo, Lynx, Sea-Doo, Can-Am, Alumacraft boats and more. While the company's heritage is in snowmobiles, information technology has also grown to go a big seller of all-terrain vehicles (ATVs) and side-past-side vehicles (SSVs).

In the third quarter ended Oct. 31, BRP had sales of over 1.67 billion CAD (over $1.31 billion), ane.9% higher than in the aforementioned quarter a twelvemonth before. However, on the bottom line, information technology had operating profits of 284.iii million CAD (near $223 million), nearly 37% higher YOY.

Every bit a consequence of a more than profitable sales mix in fiscal 2021, the visitor is expected to grow its normalized earnings per share (EPS) by about 37% this twelvemonth, despite an overall i.iv% decline in sales. Consumers are paying top dollar for its year-circular products (ATVs, SSVs) and that'due south 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 upwardly marginally over the two-year period. At the same time, DOOO stock is upwards 177% over the same catamenia.

As information technology continues to gain global market share, I expect BRP to go on delivering stiff double-digit returns for shareholders in 2021, earning its identify on this listing of the all-time Canadian stocks.

Enbridge (ENB)

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In 2019, Enbridge generated 30.1 billion CAD ($23.half-dozen billion) in the United States, bookkeeping for roughly threescore% of its overall revenues (Page 120). In the past two fiscal years, ENB'southward sales in Canada have grown by 10.4%. South of the border, still, they grew past a more robust fourteen.iv% over the aforementioned menses. While that might not seem similar 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 list are growth-oriented stocks. But Enbridge — whose energy infrastructure helps go along 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.v cents CAD. The annualized dividend rate of iii.34 CAD yields a very good for you 7.8%. Plus, with three.95 billion CAD ($3.1 billion) in free cash flow over the by 12 months and growing at a healthy clip, ENB stock has plenty of cash to make the annual payments.

Its full return YTD is -16%. As long as the oil and gas industry continues to sputter, Enbridge might experience the aforementioned result in 2021. However, with the company expected to begin construction on the Line 3 pipeline project in Minnesota in the year ahead, Enbridge's growth plans are starting to await up.

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

Toronto-Dominion Banking company (TD)

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It's not been a expert year for most Canadian banks, although Toronto-Dominion'southward near recent quarterly results suggest the pandemic'southward wrath may exist coming to an terminate. Recently, TD stock has come on in recent months, gaining over 18% in the past three months alone.

The bank reported its Q4 results on Dec. 3. On an adjusted basis, TD earned ii.97 billion CAD (over $2.32 billion) in cyberspace income, slightly higher than the 2.95 billion CAD ($2.31 billion) it made a year earlier. For the entire year, it earned 9.97 billion CAD (roughly $7.8 billion), a piddling more than than 20% lower than the twelvemonth before.

What'south more, Toronto-Dominion'south U.S. retail cyberbanking business accounted for roughly 30% of its overall net income during the fourth quarter, raking in 871 million CAD ($658 million). Unfortunately, information technology was 27% lower than a year before. However, its Canadian retail banking was 3% higher YOY.

The nigh important effigy in the bank'southward Q4 report, though, was the steep driblet in its provision for credit losses, which fell to 971 million CAD ($760 one thousand thousand) from ii.19 billion CAD ($ane.72 billion) at the end of the third quarter ending on July 31 (Page 7).

Also, on a positive note, analysts expected TD to earn $1.27 during the quarter. Information technology beat that estimate past 33 cents.

In one case the U.South. economy returns to normal, Toronto-Dominion's U.S. retail business ought to brand a bigger contribution to the bank'southward bottom line. And, permit's not forget that the bank too owns 13.5% of Charles Schwab (NYSE: SCHW ).

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

Thomson Reuters (TRI)

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Next on my list of some of the best Canadian stocks is TRI stock. In a challenging operating environment, Thomson Reuters reported fantabulous Q3 results on Nov. 3.

On the meridian line, sales grew by ii% during the quarter to $i.44 billion — and 3% if you exclude currency. On the bottom line, it earned 39 cents a share, 44% higher than a year earlier and 48% higher if y'all exclude currency.

In fiscal 2019, Thomson Reuters generated 79% of its $5.9 billion in acquirement in the United States. Then, even though TRI is controlled by Canada's richest family unit — the Thomsons, who own 66% of the visitor's stock — much of the company's wealth has been earned in the U.South.

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

While I don't think you're going to hit a homerun owning TRI stock the same way you will with Shopify, you tin't go wrong with this proper name if preservation of majuscule is important to y'all.

FirstService (FSV)

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Last on my listing of Canadian stocks is FirstService, a leader in outsourced property services in North America. It's definitely the smallest of the seven stocks listed in this article. Just what it lacks in company size, information technology makes up for in outsized shareholder returns. And then far in 2020, information technology's having a dandy year with a total return of over 41% YTD.

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

In the abaft 12 months ended Sep. 30, FSV had $2.67 billion in sales, ninety% of which was generated in the U.s.. The rest was made in its home base of operations of Canada. Employing approximately 24,000 people, it had trailing 12-months adjusted EBITDA of $268 million, roughly 10% of its top-line sales.

In 1995, the company had $37 million in revenue. Some 24 years subsequently in 2019, revenue was $2.41 billion. That makes for a compound annual growth charge per unit of 19% (Page five).

You can't become wrong with businesses that make or relieve customers time and coin. FirstService does both. It's an excellent long-term buy.

On the date of publication, Will Ashworth did non have (either directly or indirectly) any positions in the securities mentioned in this article.

Volition Ashworth has written about investments full-time since 2008. Publications where he'due south appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He specially enjoys creating model portfolios that stand the test 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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