Canadian stocks have seen a wave of activity and growth, especially in key sectors like energy, transportation, mining, and railroads. Today, we’ll focus on four stocks that stand out for strong long-term potential. Those are Canadian Natural Resources (TSX:CNQ), TFI International (TSX:TFII), Taseko Mines (TSX:TKO), and Canadian Pacific Kansas City (TSX:CP). These companies are driving growth through strategic acquisitions, expanding their assets, and capitalizing on industry trends. Let’s take a closer look at each.
Transport
Canadian Pacific Kansas City continues to shine after its merger with Kansas City Southern (KCS). This created the first rail network connecting Canada, the U.S., and Mexico. The unique positioning offers tremendous growth opportunities in cross-border trade, particularly in key sectors like automotive and agriculture. CP’s revenue grew by 13.5% in the second quarter of 2024. While its earnings per share took a slight hit, the long-term growth potential remains strong with increased trade flows expected. The stock’s forward price/earnings (P/E) of 21.4 and a solid operating margin of 38.4% underscore its profitability and appeal.
Meanwhile, TFI International (TFII) has made significant strides in the logistics and transportation industry, particularly with its acquisition of Daseke. This move allows TFII to expand its footprint in specialized transportation, giving it an edge in North America. Despite a slight dip in earnings for the most recent quarter, TFII saw 26.4% growth in revenue year-over-year. The company’s strong balance sheet, with a forward P/E of 15.7 and a dividend yield of 1.17%, shows its resilience and potential for continued growth as it integrates Daseke’s operations.
Digging down
Then there are the companies digging for our essentials. In this case, Canadian Natural Resources (CNQ) has been a powerhouse in the energy sector, particularly with its recent acquisition of Athabasca Oil’s assets. This acquisition strengthens CNQ’s position in one of the most lucrative oil sands regions. The company’s earnings for the second quarter of 2024 showed revenue growth of 14.7%, with strong profits driven by a rise in oil production and favourable market conditions. With a forward P/E of 13.8 and a dividend yield of 4.2%, CNQ offers value and income potential, thus making it a solid long-term play for energy investors.
Meanwhile, Taseko Mines (TKO) is a rising star in the mining sector, particularly due to its growth in copper production. With the expansion of the Gibraltar Mine, one of the largest open-pit copper mines in North America, Taseko is well-positioned to capitalize on the growing demand for copper. This metal is essential for green energy technologies, as well as many essential daily products. The company’s quarterly revenue growth was a remarkable 23.1% and its forward P/E of 12.3 signals it is still undervalued. Taseko’s focus on increasing copper output makes it a compelling option for investors looking to tap into the electric vehicle and renewable energy boom.
Bottom line
Valuation-wise, these four stocks are attractively priced relative to their growth potential. CNQ, with its robust cash flow and increasing dividend, offers both income and growth. TFII’s expansion into new markets through acquisitions provides a pathway to continued growth. Meanwhile, Taseko’s copper production and resource expansion make it an undervalued gem in the mining sector. CP’s unique rail network and strong trade positioning further enhance its long-term appeal.
Altogether, these four Canadian stocks are trending for good reasons. Whether it’s through strategic acquisitions, asset expansion, or capitalizing on industry trends, CNQ, TFII, Taseko, and CP offer strong long-term growth potential. Investors looking to diversify their portfolios with energy, transportation, mining, or infrastructure plays would be wise to consider these stocks.