Make America Great Again Hat Vector

As someone who lives and breathes the Canadian fashion of life, I oft become called on past InvestorPlace to write most Canadian stocks to buy.

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

In November, CEOs across Canada and those operating from inside the U.S. were definitely sweating the details. After all, when the U.S. 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 apace." Leblanc teaches governance, law and ethics at York University in Toronto.

Well, Joe Biden won and Donald Trump lost. Canada volition now get ready to see how the relationship shifts — and it always does after a modify in presidents.

And so, for this article, I'm recommending seven Canadian stocks that generate a pregnant amount of their revenue in the Usa. As the headline reads, each 1 could be considered the feather in America'due south chapeau.

• 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 call back when I first recommended this apparel make back in August of 2016. I called LULU stock a pinnacle 50 Southward&P 500 investment over the next decade. The only problem was information technology wasn't office of the alphabetize — and still isn't.

At the time, Lululemon's sales in the U.S. deemed for over lx% of its fiscal 2015 revenue of $$2.1 billion (Page 61). In the visitor's fiscal year 2019, U.S. sales accounted for over 71% of its $4 billion in annual revenue.

Despite an increase in the percentage of sales generated in the U.Due south. over these four fiscal years, the company as well did an excellent chore of growing sales in its dwelling marketplace of Canada and overseas.

Equally big a bargain equally this pick of the Canadian stocks was 4 years ago, it's an even bigger bargain today.

On Dec. 10, it reported Q3 2020 sales that grew 22% twelvemonth-over-year (YOY), despite a serious downturn in walk-in traffic due to Covid-19. CNBC reports that Neil Saunders, the Retail Managing Director at GlobalData, said, "While a V-shaped recovery may not be materializing for well-nigh of apparel retail, Lululemon has bounced back from the weak start to its twelvemonth with a stunning set of tertiary-quarter numbers […] Our information likewise show that Lululemon has picked upwardly plenty of new shoppers, particularly in womenswear."

And then, when it comes to retail, Lululemon is one of the best stocks to own — and information technology just happens to exist run out of Vancouver.

Shopify (SHOP)

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Given the returns of tech stocks in 2020, Shopify's performance — a twelvemonth-to-date (YTD) total return of 195% through December. 18 — seems almost pedestrian.

The reality is, though, that SHOP stock is having a good yr and (disallowment some major alter in consumer shopping habits) the company'south e-commerce platform will remain in demand for companies of all sizes.

As InvestorPlace'due south Faisal Humayun stated recently, Shopify is crushing it .

"From a financial perspective, the visitor reported cash and equivalents of $half dozen.1 billion [as of the terminate of September]," Humayun wrote on Dec. xiv. He added, "In addition, with improving operating leverage, I expect operating cash flows increase in the coming years. This will permit the company to continue ambitious investments in growth and inquiry and development."

The terminal time I covered SHOP on a single-stock basis was in April, when it traded around $525. At the fourth dimension, I wondered if the stock would be heading to $650 or back to $350 , where information technology traded during the March correction.

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

Heading into 2021, I don't know if SHOP volition double again. Notwithstanding, solid returns definitely appear to be in the cards for this ane of the Canadian stocks, given its concern model'due south undeniable strength.

BRP (DOOO)

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

In the third quarter ended Oct. 31, BRP had sales of over ane.67 billion CAD (over $ane.31 billion), 1.9% higher than in the aforementioned quarter a year earlier. Still, on the bottom line, it had operating profits of 284.three million CAD (about $223 million), nearly 37% higher YOY.

As a event of a more assisting sales mix in fiscal 2021, the visitor is expected to abound its normalized earnings per share (EPS) past nigh 37% this twelvemonth, despite an overall ane.4% decline in sales. Consumers are paying top dollar for its year-circular products (ATVs, SSVs) and that'south showing up on the income argument.

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

Every bit it continues to gain global market place share, I expect BRP to continue delivering strong double-digit returns for shareholders in 2021, earning its place on this listing of the all-time Canadian stocks.

Enbridge (ENB)

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In 2019, Enbridge generated 30.one billion CAD ($23.6 billion) in the United States, accounting for roughly lx% of its overall revenues (Page 120). In the by two fiscal years, ENB's sales in Canada have grown past x.four%. South of the border, however, they grew by a more robust 14.4% over the aforementioned menstruum. While that might not seem like a large difference, when you're talking about over 50 billion CAD in annual revenue, it's noticeable.

At present, most of the Canadian stocks on this listing are growth-oriented stocks. But Enbridge — whose energy infrastructure helps keep Due north America running — is a combination of value, growth and income.

On December. 8, the company alleged a 3% increase in its quarterly dividend to 83.5 cents CAD. The annualized dividend rate of iii.34 CAD yields a very healthy 7.8%. Plus, with 3.95 billion CAD ($3.ane billion) in free cash flow over the past 12 months and growing at a good for you clip, ENB stock has plenty of cash to make the annual payments.

Its total return YTD is -16%. As long as the oil and gas manufacture continues to sputter, Enbridge might feel 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 wait up.

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

Toronto-Dominion Depository financial institution (TD)

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It's not been a good year for virtually Canadian banks, although Toronto-Dominion's virtually recent quarterly results suggest the pandemic'southward wrath may be coming to an stop. Recently, TD stock has come on in recent months, gaining over xviii% in the by three months alone.

The depository financial institution reported its Q4 results on Dec. three. On an adjusted basis, TD earned two.97 billion CAD (over $two.32 billion) in net income, slightly college than the 2.95 billion CAD ($2.31 billion) information technology made a twelvemonth before. For the entire year, it earned 9.97 billion CAD (roughly $7.eight billion), a lilliputian more than twenty% lower than the twelvemonth before.

What'due south more, Toronto-Dominion'due south U.Southward. retail banking business accounted for roughly 30% of its overall net income during the fourth quarter, raking in 871 1000000 CAD ($658 meg). Unfortunately, it was 27% lower than a year before. However, its Canadian retail banking was 3% higher YOY.

The most of import figure in the banking concern's Q4 study, though, was the steep drib in its provision for credit losses, which roughshod to 971 million CAD ($760 million) from 2.xix billion CAD ($1.72 billion) at the end of the tertiary quarter ending on July 31 (Page vii).

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

One time the U.Due south. economy returns to normal, Toronto-Rule's U.S. retail business ought to make a bigger contribution to the depository financial institution's bottom line. And, let's non forget that the banking concern also owns 13.five% of Charles Schwab (NYSE: SCHW ).

In the concurrently, savor its 4.3% dividend yield. Out of all of the Canadian stocks on the market place, TD is definitely a solid pick.

Thomson Reuters (TRI)

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

On the top line, sales grew by two% during the quarter to $1.44 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% college if you exclude currency.

In fiscal 2019, Thomson Reuters generated 79% of its $5.nine billion in revenue in the U.s.. So, even though TRI is controlled past Canada's richest family — the Thomsons, who own 66% of the company'southward stock — much of the company's wealth has been earned in the U.S.

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

While I don't recollect you're going to hit a homerun owning TRI stock the same way you lot volition with Shopify, you can't get wrong with this name if preservation of capital is important to you.

FirstService (FSV)

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Last on my list of Canadian stocks is FirstService, a leader in outsourced property services in Northward America. It'due south definitely the smallest of the seven stocks listed in this commodity. But what it lacks in visitor size, information technology makes up for in outsized shareholder returns. So far in 2020, it's having a neat yr 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 holding services" similar painting, property damage restoration, flooring, closets and home inspections.

In the trailing 12 months concluded Sep. 30, FSV had $2.67 billion in sales, 90% of which was generated in the United States. The rest was made in its domicile base of Canada. Employing approximately 24,000 people, information technology had abaft 12-months adjusted EBITDA of $268 million, roughly 10% of its meridian-line sales.

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

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

On the date of publication, Will Ashworth did not have (either direct or indirectly) any positions in the securities mentioned in this article.

Will Ashworth has written near 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 particularly enjoys creating model portfolios that stand the test of fourth dimension. 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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