Latest news with #CanadianStocks
Globe and Mail
22-05-2025
- Business
- Globe and Mail
BMO's Belski says TSX outperformance has come to an end
Brian Belski, BMO Capital Markets' chief investment strategist, thinks the S&P/TSX Composite Index is no longer positioned to outperform stocks on Wall Street, a stance he has held over the past 12 months. In May of 2024, Belski contended that the Canadian benchmark's relative value to the S&P 500, as well as several expected key catalysts and contrarian indicators, would mean the TSX would outperform. That indeed panned out: the TSX has retuned more than 15% over the past year, compared to about 10% for the S&P 500. And those figures don't even account for the TSX's higher dividend payout relative to the U.S. benchmark. 'However, we believe Canadian stocks are now more likely to perform in line with their neighbour to the south over the next 12 months,' Mr. Belski said in a note Thursday morning. 'To be clear, we still believe Canada offers strong relative value, downside protection, and will continue to benefit from broadening equity performance. However, unfortunately we believe much of the 'catch-up' trade that we called for last year has likely played out," he said. Mr. Belski emphasized that he's not recommending investors underweight Canadian equities. 'Instead, it reflects the sharp outperformance of the TSX as relative valuations have started to normalize, growth profiles have converged, and foreign flows have rebounded from deeply depressed levels. With most of these tailwinds likely behind us, we believe it will be tough for Canada to exhibit the same level of outperformance over the next 12 months.' Mr. Belski has long maintained that the U.S. is in a 25-year secular bull market, and he's certainly not diverging from that view. That in itself would mean Canadian stocks, which largely follow the U.S. market, will perform well. But he now believes 'the US is likely to return to its role as the primary fundamental driver of growth and ultimately re-take the leadership mantle as trade noise and risks subside.' Mr. Belski said the spread between valuations of the TSX and the S&P 500, which BMO calculates using several measures such as price to earnings and price to book, has narrowed sharply over the last year - from a record spread of almost two standard deviations to under one standard deviation now. He expects Canada to continue to have a discount versus the U.S. going forward. Mr. Belski also said Canadian earnings growth trends have now fully normalized to be back in line with the S&P 500. And foreign investment flows have rebounded sharply, and no longer offer a contrarian signal.
Bloomberg
21-05-2025
- Business
- Bloomberg
Canadian Stocks Poised to Gain Further After Key Level Crossed
Investors and market-watchers expect Canadian stocks to gain further after a major stock benchmark rode a 10-day winning streak to close above a key threshold on Tuesday, for the first time. The S&P/TSX Composite Index ended Tuesday above 26,000, notching its third-straight record high on the back of its longest stretch of gains since 2021. The index edged lower in early Wednesday trading as stocks globally pared recent gains.
Yahoo
14-05-2025
- Business
- Yahoo
1 Magnificent Canadian Stock Down 29% to Buy and Hold Forever
Written by Amy Legate-Wolfe at The Motley Fool Canada Finding a Canadian stock you can buy, hold, and feel good about for years is never easy, especially when the market is full of noise. But every once in a while, a company shows up with steady growth, rising dividends, and a solid business model that makes it feel like a keeper. For Canadian investors looking for just that, goeasy (TSX:GSY) might be the hidden gem worth scooping up. It's one magnificent stock that has quietly built a reputation for strong returns, and right now, it's on sale. goeasy is a non-prime lender that helps Canadians access personal loans, retail financing, and lease-to-own products. While it doesn't operate in the same world as the big banks, that's actually the point. It serves borrowers who may not qualify for traditional loans, filling a crucial gap in the financial system. Its main divisions, easyfinancial and LendCare, offer everything from $500 emergency loans to financing for car repairs and furniture. And Canadians are lining up. Loan demand remains strong even with higher rates, and goeasy continues to see record originations. Despite this strength, goeasy's stock has taken a hit. As of writing, it trades around $146, down 29% from its 52-week high of $206.02. So, what gives? Like many lenders, goeasy has faced rising loan-loss provisions as consumers feel the pinch of higher borrowing costs. That's led to a short-term dip in earnings. In the Canadian stock's latest results for the first quarter (Q1) of 2025, revenue came in at $391.9 million, a year-over-year increase of 10.7%. However, adjusted earnings per share (EPS) were $3.53, down from $3.83 the year before, and were short of analyst expectations. Even so, the long-term picture remains bright. Loan originations in Q4 2024 reached a record $814 million, pushing the total loan book to $4.6 billion, up 26% year over year. That kind of growth doesn't happen by accident. The Canadian stock continued to build its customer base while improving efficiency. It's also been expanding its reach, including a stronger push into point-of-sale financing through LendCare, which partners with businesses across Canada to offer payment plans to customers. Dividends are another reason goeasy stands out. It has raised its dividend every year for nearly a decade, and in 2024, the Canadian stock hiked it by 25%, bringing the annual payout to $5.84 per share. That gives it a yield of roughly 3.7% at current prices. Not bad for a growth company. And this isn't a stretch-the-budget kind of dividend. goeasy's payout ratio remains conservative, with management signalling confidence in both earnings and cash flow. goeasy has also made headlines recently for a big leadership change. Dan Rees, a veteran from Scotiabank, is stepping in as CEO this month. He brings with him years of experience in Canadian banking, including retail and commercial segments, which should help guide goeasy through its next growth phase. Investors often get nervous around leadership changes, but this one feels like a win. Rees knows how to scale a financial business responsibly, and his arrival signals that goeasy is preparing for an even bigger future. Management has laid out an ambitious long-term plan. By 2027, goeasy expects its loan portfolio to grow to between $7.35 billion and $7.75 billion. That's more than 60% growth from current levels. It also plans to keep the total yield around 30%, thanks to product diversification and smart underwriting. Even if interest rates stay higher for longer, goeasy believes it can deliver consistent, profitable growth. So, is this stock worth buying and holding forever? If you're looking for a mix of growth, income, and staying power, it just might be. The Canadian stock is recession-resistant, thanks to strong demand from a specific customer base. The dividend keeps growing. And the company has room to scale both organically and through new partnerships. While the Canadian stock is down now, the fundamentals haven't changed. If anything, this dip offers an ideal entry point. The post 1 Magnificent Canadian Stock Down 29% to Buy and Hold Forever appeared first on The Motley Fool Canada. Before you buy stock in goeasy, consider this: The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and goeasy wasn't one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years. Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the 'eBay of Latin America' at the time of our recommendation, you'd have $21,345.77!* Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 24 percentage points since 2013*. See the Top Stocks * Returns as of 4/21/25 More reading Made in Canada: 5 Homegrown Stocks Ready for the 'Buy Local' Revolution [PREMIUM PICKS] Market Volatility Toolkit Best Canadian Stocks to Buy in 2025 Beginner Investors: 4 Top Canadian Stocks to Buy for 2025 5 Years From Now, You'll Probably Wish You Grabbed These Stocks Subscribe to Motley Fool Canada on YouTube Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. 2025
Globe and Mail
08-05-2025
- Business
- Globe and Mail
BMO chief strategist recommends these high quality Canadian stocks
Daily roundup of research and analysis from The Globe and Mail's market strategist Scott Barlow BMO chief investment strategist Brian Belski recommended that clients add quality domestic stocks where earnings expectations are turning negative, 'We recently adjusted our 2025 EPS target for the TSX down 3% (from $1,600 to $1,550), reflecting what we believe is a minor 'tweak' when considering all the emotion, rhetoric, and frankly, unsubstantiated 'noise' that has bullied many analysts, companies, and macro-observers … TSX earnings estimates will likely remain under pressure over the near term. In fact, forward earnings revision trends, which had been stagnant throughout the year as analysts assessed the trade risks, have started to decidedly swing negative since the end of March. From our perspective, Canadian stocks are exhibiting a well-anticipated negative revision cycle, one we believe has already been fully priced in… As such, we believe investors should not be reactionary to negative guidance and instead use the downward revision cycle for what it truly represents – an historically tested and proven contrarian indicator. Overall, we continue to believe investors should remain focused on high-quality Canadian companies, while also overlaying a contrarian revision tilt. As such, we have included a screen of high-quality Canadian companies that have exhibited decelerating breadth of positive revisions over the past several months' The stock screening process involved low beta stocks with earnings below market average, positive free cash flow, return on equity above market average, where the percentage of upward to total earnings revisions is below 45 per cent. The stocks are ATCO Ltd. Class 1, Alimentation Couche-Tard Inc., Bank of Montreal, Cogeco Communications Inc., CCL Industries Inc., Canadian National Railway Company, Constellation Software Inc., Dollarama Inc., Enghouse Systems Limited, CGI Inc., Great-West Lifeco Inc., iA Financial Corporation Inc., Intact Financial Corporation, IGM Financial Inc., Killam Apartment REIT, Manulife Financial Corporation, National Bank of Canada, North West Company Inc., Quebecor Inc., Restaurant Brands International Inc., Rogers Communications Inc., Royal Bank of Canada, Sun Life Financial Inc., Suncor Energy Inc., TransAlta Corporation, TC Energy Corporation and George Weston Limited. ** Scotiabank strategist Robert Hope raised his valuation expectations in the utilities sector, 'OUR TAKE: Neutral. Canadian Utilities (CU) results were in line with our expectations, while ATCO beat our and consensus estimates. There were no material project updates and our go-forward estimates do not materially move. The market is rewarding high-quality, defensive companies, such as the utilities, with higher valuations. As such, we increase our target P/E multiple by 0.5x to 15.0x, which is roughly where the shares are trading on 2026 estimates. As a result, our CU target increases to $40 from $39, and our ATCO target price increases to $54 from $53. We see CU trading at 14.9x 2026E P/E, a discount to Emera at 18.0x, Fortis at 19.1x, and Hydro One at 24.5x. Our $40.00 target price is predicated on a 15.0x 2027E P/E, which is a discount to Emera at 17.25x, Fortis at 18.5x, and Hydro One at 20.0x. We see ATCO trading at a ~17% discount to our estimated NAV, versus the long term average of ~26%' *** Jefferies analyst Blayne Curtis report on Advanced Micro Devices earnings has implications for the AI investing theme, 'Co. reported 1Q results last night beating on both the top and bottom lines. However, the outlook for AI growth was disappointing as it will require a significant 2H ramp to hit this year's expectations and is tied to the MI350 launch. In our view, the growth outlook for the year is at risk and we think this might not be the last cut to AI revenue estimates. Additionally, the PC market is expected to be 'sub-seasonal' in 2H which we think is conservative given the stronger than expected 2H last year and before considering any tariff driven demand destruction. We remain on the sidelines as there is no real upside without a viable AI story. Our '25 & '25 EPS estimates remain below consensus' *** Bluesky post of the day: Diversion: 'These authors were sold a romantasy convention. Instead, they got the Fyre Festival of the book world' – CBC
