If you would like progress in your portfolio this 12 months, two Canadian small caps deserve your consideration proper now: Hammond Energy Options (TSX:HPS.A) and BQE Water (TSXV:BQE).
These should not family names. However the numbers behind them are arduous to disregard. One is driving the worldwide wave of electrification and information centre development. The opposite is quietly constructing a recurring income machine within the area of interest however crucial world of mine water therapy.
Each posted document outcomes, and their administration groups are signaling that 2026 may very well be even higher.
Right here is the bull case for these two high Canadian shares.
Supply: Getty Pictures
Is that this TSX inventory an excellent purchase?
Valued at a market cap of $3.6 billion, Hammond Energy Options makes energy transformers. Knowledge centres, electrical car charging networks, grid upgrades, and industrial electrification tasks want large quantities of energy infrastructure to come back on-line, making Hammond Energy a high inventory to personal proper now.
Within the first quarter of 2026, the corporate posted gross sales of $264.8 million, a rise of 31.5% 12 months over 12 months. Progress was led by the U.S. and Mexico, the place income rose practically 42% 12 months over 12 months.
Furthermore, the backlog grew sequentially and is considerably larger than it was a 12 months in the past, offering visibility into future progress.
Adjusted earnings per share rose from $1.60 to $2.08 over the past 12 months. It additionally reported that adjusted earnings earlier than curiosity, taxes, depreciation, and amortization (EBITDA) rose to $41 million, in comparison with $30.9 million within the prior-year interval.
Hammond’s CEO, Adrian Thomas, famous that demand for customized merchandise, significantly for information centres, continues to drive each quantity and a extra worthwhile product combine.
The corporate expects to have roughly $1.2 billion in annual income capability by 12 months finish as its manufacturing enlargement in Mexico ramps up.
Analysts monitoring the TSX inventory forecast free money movement to increase from $63 million in 2026 to $168 million in 2030.
For traders, Hammond gives a uncommon mixture: a boring, real-world industrial enterprise with explosive demand tailwinds and a rising backlog.
Is that this small-cap inventory undervalued?
BQE Water is without doubt one of the extra compelling under-the-radar progress tales on the TSX. The corporate supplies water therapy providers and expertise to the mining trade, with a give attention to recurring fee-based contracts. It doubled gross sales in 2025 to $35.5 million, whereas web earnings grew 68% to $8.1 million and adjusted EBITDA rose 47% to $8.2 million.
These numbers replicate two main Yukon chemical providers tasks that contributed roughly $20 million in income, plus expanded operations at Raglan and new plant startups in China and North Dakota.
CEO David Kratochvil was candid about what has modified at BQE. The sector operations workforce has tripled or quadrupled in dimension over the previous 12 months. BQE just lately gained new contracts at Canadian Royalties and Britannia, each on vegetation initially constructed by others.
Administration additionally flagged a significant shift within the nature of recent work. In early 2025, most technical providers tasks had been small and short-cycle. Now, the pipeline is dominated by prefeasibility and feasibility research that take months to finish.
Furthermore, a brand new aquatic toxicity lab was close to completion as of the This autumn name, including a recent income stream in environmental testing providers that current shoppers have already expressed curiosity in.
Analysts monitoring the small-cap TSX inventory forecast free money movement to extend from $4.9 million in 2025 to $7.2 million in 2027. Based mostly on consensus value targets, it trades at a 30% low cost as of Could 2026.
