Nine high-flying Canadian stocks with strong momentum
Tariffs and trade wars have dominated news headlines and kept investors on their toes, and recent comments from President Donald Trump suggesting the United States might impose 30-per-cent tariffs on imports from the EU and Mexico in August could dampen market momentum. While European markets retreated slightly following these comments, the Nasdaq 100 and S&P TSX Composite Index both hit all-times highs, suggesting that investors may have accepted that tariffs will remain in place, and have shifted their focus back to market fundamentals.
The S&P TSX Composite rose by 0.65 per cent on Monday, driven higher by the information technology, industrial, and energy sectors. These gains follow a surprise drop in Canadian unemployment for June, which fell by 0.1 per cent to 6.9 per cent with the addition of 83,000 jobs. Investors can expect more economic data releases this week, with the Consumer Price Index data expected on Tuesday, which is likely to guide interest rate policy decisions for the Bank of Canada and could play a role in whether markets continue to move higher. Today, we screen for Canadian-listed companies demonstrating strong momentum amid newly minted all-time highs.
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The London Stock Exchange Group (LSEG), is one of the world's largest providers of financial market data and infrastructure, serving more than 40,000 institutions worldwide. LSEG provides information, insights, and technology that drive innovation and performance in global financial markets, enabling the financial community to trade smarter and faster, overcome regulatory challenges, and scale intelligently.
The screen, ranked by StarMine Price Momentum model, produced nine companies.
Nutrien Ltd. NTR-T, which scored 96 in the StarMine Price Momentum model, is a global provider of crop inputs and services operating a network of production, distribution, and agriculture retail facilities. The Saskatoon-based company operates four business segments, which include retail, potash, nitrogen, and phosphate, and management is focused on driving operational efficiency, expanding high-return growth opportunities, and remaining disciplined with capital allocation. Nutrien completed two acquisitions in the first quarter, and maintained their 2025 full-year guidance range, with management expecting growth in potash and nitrogen sales volumes.
The new case for Nutrien: In a dangerous world, fertilizer shines
While Nutrien posted a lower average net selling price for potash in the quarter, driven by a decline in North American benchmark prices, demand is expected to remain strong through 2025, which should help boost their average net selling price. Nitrogen was a strong contributor to performance, with higher average net selling prices helping to offset lower volumes. Nitrogen markets have been affected by supply disruptions from Iran and Egypt, and if these disruptions persist, prices could benefit in the short term, providing some tailwinds for the stock.
Magellan Aerospace Corp. MAL-T, which scored 100 on the StarMine Price Momentum model, is a diversified supplier of components to the aerospace industry. Mississauga-based Magellan designs, engineers, and manufactures aeroengine and aerostructure components for aerospace markets, and in the first quarter derived 62.2 per cent of revenues from commercial markets and 27.8 per cent of revenues from defence markets. The company reported first-quarter revenue of $260.9-million, an increase of 10.9 per cent from a year earlier, driven by higher casting product revenues in Canada, and higher engine shaft revenues in the United States.
It hasn't all been clear skies for Magellan, which was affected by the 2024 strike at Boeing and a total order backlog of more than 8,000 aircraft at Airbus. The possibility of tariffs have also been looming, however the outlook for defence spending remains strong, party driven by NATO's defence spending commitments, which could support further growth for Magellan.
Investors are advised to do their own research before trading in any of the securities shown.
Stephen Donovan, MBA, is a Sales Specialist covering commodity markets at LSEG.
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CBC
25 minutes ago
- CBC
P.E.I. hits record housing starts, but experts say more needed to restore affordability
Social Sharing Housing starts on Prince Edward Island reached a record high last year, but a recent report says even more construction is needed to make homes affordable. In 2024, there were 1,684 housing starts, a 48.7 per cent increase from the previous year and the highest total since the 1970s. That brings the province close to the goal laid out in its housing strategy, released last year, which identifies the need for an average of 2,000 new homes per year between now and 2030. But the latest supply gaps estimate report from the Canada Mortgage and Housing Corporation says that, based on projected demand, Canada needs to essentially double its current pace of home construction to return to pre-pandemic levels of housing affordability. For P.E.I., that means increasing the projected average of about 1,300 annual housing starts between 2025 and 2035 to nearly 2,200 per year — surpassing even the province's all-time record of 2,122 starts set in 1973. That remains the only year since 1948, the earliest data from CHMC is available, when housing starts on the Island exceeded 2,000. Construction industry at capacity Sam Sanderson, executive director of the Construction Association of P.E.I., said reaching 2,200 housing starts may prove difficult. He said the province's construction sector, which employs more than 8,500 people year-round, is already operating at full capacity. "To say it's not achievable, I'd be lying," Sanderson told CBC News. "But there needs to be some changes, there needs to be some additions, and there needs to be some investment into construction to even look at those numbers." Sanderson said innovations in the industry are helping, including pre-manufactured wall systems and modular construction that allow for faster, more affordable builds. But labour remains a major constraint. The industry is facing a shortage of skilled workers across multiple trades, he said, and productivity has dropped as experienced workers retire. "We're saying right now, it takes pretty near 2.2 new people to do the same amount of work one person did... 20 years ago or 10 years ago," Sanderson said. "We need to find ways to increase productivity." The association has been trying to bring more workers into the industry through training programs and outreach. Last year alone it made more than 50 visits to schools across the Island. But Sanderson said more investment is needed — not just into housing projects, but into people. That includes recruitment, training and skilled trades support, especially as P.E.I. competes with other provinces. He pointed to Nova Scotia's commitment, announced in 2023, to invest $100 million over three years in recruiting skilled tradespeople as the type of investment P.E.I. needs to match. "We need to see some large-scale investments like that into our industry here in P.E.I. to be able to increase our capacity to build," Sanderson said. He added that governments must also prioritize targeted immigration strategies to attract skilled workers for the construction industry. 'The momentum has continued' Staff with Fusion Charlottetown — a non-profit based in P.E.I.'s capital that advocates for youth and young adults on issues such as housing affordability — the record-breaking year was a welcome development. The pace has continued. In the first two quarters of 2025, there have already been 751 housing starts — the most for that time period since 1973. "We're definitely pleased to see it over the past year," said Fusion Charlottetown's vice-president, Matt Pelletier. "What we're pleased to see is that the momentum has continued." Pelletier acknowledged that the 2,200 target is ambitious, but said it can be within reach. "With the right mechanisms, the right fiscal tools and the right alignment with land use, it's possible to do that again," he said. "It's going to require all orders of government coming together to make that happen." Incentives and policy changes needed Before the province tabled its 2025-26 operating budget, Fusion Charlottetown submitted a list of policy recommendations aimed at boosting the housing supply. These included encouraging apartment construction in urban areas and funding "housing-enabling infrastructure" such as roads and sewer systems, which are essential for making new housing developments possible. Fusion Charlottetown is also calling for the extension of rental construction sales tax rebates to affordable housing projects. In the fall of 2023, the federal government brought in legislation to remove the GST on new rental developments. Shortly after, the P.E.I. government followed suit by eliminating the provincial portion of the HST for new rental builds in hopes of spurring construction. Fusion Charlottetown wants to see those rebates expanded to include different forms of affordable housing, such as co-operative housing and affordable home ownership initiatives like Habitat for Humanity projects. "Creating a sales tax mechanism to allow for those sorts of units to be built would be favourable when it comes to creating affordable housing options," Pelletier said. Prince Edward Island is managing the housing crisis just about as well as anyone in the country. — Mike Moffatt, Missing Middle Initiative The organization is pushing for municipal policy changes too, like harmonizing building codes, and it's also advocating for Charlottetown to have a fast-track approval system for affordable housing projects. "In a lot of cases, the delays relating to those can contribute to the input costs of affordable housing projects, effectively undermining the affordability that they're trying to create," Pelletier said. Is 2,200 the right number? Housing policy expert Steve Pomeroy said it's important to look critically at the 2,200 figure and consider whether that many homes are really needed on P.E.I. Pomeroy, an industry professor at McMaster University and member of the Canadian Housing Evidence Collaborative, said the CMHC's projections are a theoretical exercise focused only on supply. But he said the real challenge is ensuring affordability — and that won't be solved by supply alone. Developers are unlikely to build units that would lower their profits, leaving many new homes still out of reach for low-income residents, Pomeroy said. "So rather than just any kind of supply, we need to think about, how do we actually create supply of more affordably priced homes? Which means invoking the role of the non-market sector, non-profits and co-operatives who respond to different signals than the market does," he said. "Those are provided with subsidies from government… and they have a mission to address affordability." Pomeroy pointed to the broader need for more social housing across the country, citing a 2023 Scotiabank report that found just 3.5 per cent of Canada's total housing stock is social housing — half the Organisation for Economic Co-operation and Development average of around seven per cent. P.E.I. stands out on social housing Despite Canada's lag in social housing, P.E.I. is making some progress. The province's housing strategy includes a $176-million investment over five years to establish 560 government-owned social housing units. In a statement to CBC News, the Department of Housing, Land and Communities said that by the end of the last fiscal year, 227 new social housing units were under design and/or construction. That's already 40 per cent of the five-year target. WATCH | P.E.I. government giving millions to let housing non-profits and co-ops buy and rent out 116 units P.E.I. government giving millions to let housing non-profits and co-ops buy and rent out 116 units 17 days ago The provincial government in P.E.I. is partnering with three non-profit groups to let them acquire existing affordable housing units and build new ones. So far, the project has led to 116 units in Charlottetown and Summerside moving out of the hands of private landlords, at a cost of about $7.5 million. CBC's Connor Lamont explains. The province said it made a "historic" capital investment of $63 million in the 2024-25 fiscal year to support new social housing, adding a record 149 units to the system: 37 through construction and 112 through acquisitions. That surpassed the previous record set in 2023-24, when 142 units were added. "Through these investments, the social housing registry was reduced to the smallest waitlist in well over a decade, with a low of 389 as of March 31, 2025," the statement read. A national report card, released by the Missing Middle Initiative at the University of Ottawa, recently evaluated provincial housing policies across Canada. P.E.I. received an A for construction of social housing, the highest grade in the country. "Prince Edward Island… came out with a plan to increase social housing that was particularly detailed — more detailed than we're seeing here in Ontario," said Missing Middle Initiative founding director Mike Moffatt.
Globe and Mail
43 minutes ago
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Best Stock to Buy Right Now: Target vs. Costco
Key Points Costco has 80 million paid household members. Target recently raised its dividend for the 54th consecutive year. Target favors share repurchases, while Costco prioritizes maintaining a strong balance sheet. 10 stocks we like better than Costco Wholesale › Costco Wholesale (NASDAQ: COST) and Target (NYSE: TGT) are two of the most recognizable names in American retail. While both have been longtime winners for shareholders, their stocks have lost steam in recent months. However, when established leaders hit a rough patch, it can create a timely opportunity to invest at a more reasonable price. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » Let's take a closer look at the valuation, shareholder returns, and recent financial performance to see which of these retail giants looks like the better buy today. Does Costco or Target have a better valuation? Valuation is critical in determining whether a stock is priced attractively relative to its earnings potential. It helps investors gauge whether they're paying a fair price, a premium, or a potential bargain. Target and Costco are blue chip retailers, but the market values them differently. Costco, up just 2% in 2025, carries a market capitalization of more than $413 billion -- nearly 3 times the $47 billion of Target, which has seen its stock fall 23% year to date. That gap reflects investor confidence in Costco's steady growth and recurring membership revenue, while Target continues to work through declining sales. Costco trades at a trailing price-to-earnings (P/E) ratio of 52.8 -- well above its three-year median of 46.5 -- suggesting the stock may be richly valued. In contrast, Target trades at just 14.6 times trailing earnings, below its three-year median of 17, pointing to a potential discount. While valuation alone doesn't tell the whole story, it's a meaningful starting point, and in this case, Target has the edge over Costco for investors looking for a discount. COST PE Ratio data by YCharts Returning capital to shareholders Costco recently increased its quarterly dividend from $1.16 to $1.30 per share, its 21st consecutive annual raise -- bringing its yield to a modest 0.56%. While the yield may seem low, Costco has a track record of rewarding shareholders with sizable special dividends during periods of strong cash flow. In fact, it has issued five special dividends over the past 13 years, including a $15-per-share payout in January 2024. With a conservative payout ratio of just 20%, Costco has plenty of room to continue growing its dividend in the years ahead. Target, meanwhile, is a Dividend King -- having raised its dividend for 54 straight years. Its most recent increase bumped the quarterly distribution from $1.12 to $1.14 per share, translating to a 4.4% yield, one of the most generous among major retailers. Notably, its 49% payout ratio leaves room for management to continue its tradition of dividend hikes. When it comes to share repurchases, Target has been the more aggressive player. It bought back $251 million worth of stock last quarter and has reduced its outstanding share count by 9.3% over the past five years. However, with the stock trading near multiyear lows, some may question the effectiveness of those buybacks. Costco, by contrast, takes a more conservative approach, spending $215 million on repurchases last quarter, mainly to offset dilution. Over the past five years, its share count has remained essentially unchanged. For income-focused investors, Target's generous yield and long-standing dividend track record are hard to beat. But its buyback strategy hasn't always delivered the intended value. Costco's disciplined approach, lower payout ratio, and history of special dividends offer a different kind of appeal. Ultimately, both companies prioritize rewarding shareholders, making this category a tie. Recent financial performance and outlook For the final, and arguably most important, category for future stock appreciation, let's examine each company's recent financial performance and near-term outlook. Costco continues to deliver strong, consistent results. In its most recent quarter, the company reported $62 billion in revenue, an 8% increase year over year, driven by its 80 million paid household members. Net income rose 13% to $1.9 billion, and comparable sales (excluding the effects of gas prices and currency fluctuations) climbed 8%. E-commerce was particularly strong, growing 15.7%. While Costco doesn't provide formal financial guidance, CEO Ron Vachris expressed confidence heading into the final quarter of fiscal 2025, saying, "While the impacts of tariffs and the outlook for the economy in general remain unknown, we are confident in the ability of our operators and merchants to rise to the challenges and continue to offer great service and find consistent values for our members." Vachris' confidence is supported by the company's membership renewal rates of 92.7% in the U.S. and Canada and 90.2% globally. Target's latest quarter, by contrast, was more uneven. Revenue declined 2.8% to $23.8 billion, with comparable store sales down 5.7%. However, digital was a bright spot, with online sales up 4.7% thanks to a 36% increase in same-day delivery. Excluding a one-time legal settlement, adjusted earnings per share (EPS) came in at $1.30, down sharply from $2.03 the year prior. CEO Brian Cornell acknowledged the challenges: "I want to be clear that we're not satisfied with this performance, and we're moving with urgency to navigate through this period of volatility." Looking ahead, Target management expects adjusted EPS of $7 to $9 for 2025, compared to $8.86 in 2024 -- signaling continued uncertainty in the months ahead. All told, Costco's consistent top- and bottom-line growth, strong digital momentum, and unmatched member loyalty give it a clear advantage in this category. Which stock is the better buy? Both Target and Costco have their strengths. If its turnaround efforts succeed, Target offers a higher dividend yield, cheaper valuation, and upside potential. On the other hand, Costco continues to deliver impressive growth, fueled by its membership model and global footprint. In a more uncertain economic environment, Costco's consistency and proven membership model make it the better buy for most long-term investors, especially considering that Costco has a stronger balance sheet with $9.1 billion in net cash versus Target's net debt of $12.6 billion. COST Net Financial Debt (Quarterly) data by YCharts Should you invest $1,000 in Costco Wholesale right now? Before you buy stock in Costco Wholesale, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Costco Wholesale wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $625,254!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,090,257!* Now, it's worth noting Stock Advisor's total average return is 1,036% — a market-crushing outperformance compared to 181% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 29, 2025
Globe and Mail
an hour ago
- Globe and Mail
PayPal Stock Dropped 9% After Earnings. Is it a Red Flag, or a Buying Opportunity?
Key Points The recent selloff for PayPal stock could be an overreaction, given management's full-year forecast. Some lackluster results in some key metrics should give investors pause before buying. 10 stocks we like better than PayPal › Shares of financial technology (fintech) company PayPal (NASDAQ: PYPL) dropped 9% on July 29 after it reported second-quarter financial results. I believe it was a clear overreaction. Investors seemed to head for the exits after looking at PayPal's second-quarter free cash flow. In Q2, the company generated free cash flow of $692 million, which was down a whopping 49% year over year. That certainly looks troubling. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » In reality, PayPal had been expecting $6 billion to $7 billion in free cash flow in 2025. After reporting Q2 results, its expectations are unchanged. The 49% Q2 drop is simply a cash-flow timing issue, not a sign of something problematic. Consequently, I believe the 9% drop for PayPal stock was overdone. But is the drop in PayPal stock's price a buying opportunity? That's a question worth exploring. What's going right for PayPal PayPal is a low-growth business at this point with just 5% Q2 revenue growth. Active accounts were only up by 2%. But the company is turning some heads when it comes to profitability. When PayPal hired Chief Executive Officer Alex Chriss in 2023, he immediately took notice of the company's transaction margin. To win large accounts, the company had lowered its prices, particularly when it was working behind the scenes with unbranded checkouts. PayPal has renegotiated some of its top contracts since Chriss' arrival, and it's lifted how much profit it makes per transaction. In Q2, the company's transaction margin dollars increased by 7%, which was notably ahead of its 5% revenue growth. When it comes to the bottom line, it gets even better for PayPal. Management has aggressively bought back stock with its profits, lowering the share count and consequently boosting its earnings per share (EPS). Q2 EPS was up 20% year over year, which is something that shareholders love to see. Since early 2022, the share count for PayPal has steadily dropped, as the chart below shows. PYPL Average Diluted Shares Outstanding (Quarterly) data by YCharts There are some caution flags out PayPal stock dropped 9% after earnings, as mentioned. It's also down 23% from 52-week highs, as of this writing. So, investors want to know if this pullback is a buying opportunity. After considering what's going right, some may be inclined to believe that it is indeed an opportunity. There is more to consider, however. First and foremost, PayPal's user growth has stalled. Active accounts were only up 2% in Q2. But more troubling was the 4% drop in transactions per active account on a trailing-12-month basis. The downward trend started in the first quarter, when transactions per account had dropped by 1% (after years of increases), but it looks like it's picking up steam now. With account growth stalling and transactions dropping, PayPal doesn't offer much to investors when it comes to revenue growth. That's why these are caution flags -- stocks that outperform the S&P 500 usually have above-average top-line growth. What's the verdict? While PayPal's recent growth leaves a lot to be desired, better growth could be around the corner. For starters, PayPal owns Venmo, and it accounts for 18% of the company's total payment volume -- a meaningful amount. Venmo's growth has accelerated in recent quarters. In the second quarter of 2024, Venmo's volume was only up 8% but it was up by 12% in Q2. This acceleration is promising. Moreover, PayPal just announced PayPal World, a partnership that will allow for interoperability with major digital wallets worldwide. Early joiners include Latin America's MercadoLibre and China's Tencent. This partnership could boost PayPal's adoption, but investors won't know for sure until after it officially launches this fall. For me, the verdict is that PayPal stock is a buy, with a caveat. The caveat is that I don't believe the company's current growth can lift the stock above the S&P 500 over the next five years. Shareholders need some of its growth initiatives to pay off. However, PayPal stock is low-risk. Its scale is vast, it's generating substantial free cash flow, and it's boosting shareholder value with stock buybacks. Even if growth continues to sputter, the company's EPS should increase modestly, lifting the shares. Because PayPal stock is down significantly from its 52-week high, there's a margin of safety with this investment. In conclusion, if things go as they are now, there may be little downside for investors. And if things get better due to things such as Venmo's growth, then it could be a market-beating investment. Should you invest $1,000 in PayPal right now? Before you buy stock in PayPal, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and PayPal wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $625,254!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,090,257!* Now, it's worth noting Stock Advisor's total average return is 1,036% — a market-crushing outperformance compared to 181% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 29, 2025
