Canadian fairness markets have maintained sturdy upward momentum, with the S&P/TSX Composite Index reaching a brand new all-time excessive yesterday and gaining greater than 34% over the previous 12 months. Regardless of this spectacular efficiency, considerations stay round elevated valuations, ongoing geopolitical tensions, and the potential impression of protectionist insurance policies on international financial progress.
Towards this backdrop, I consider traders ought to undertake a balanced method by combining progress, defensive, and dividend-paying shares to optimize returns whereas managing threat. With that in thoughts, listed below are my three prime picks.
Celestica
Celestica (TSX:CLS), a number one electronics manufacturing providers firm, has delivered returns of roughly 195% over the previous 12 months, beating the broader fairness markets. The inventory’s sturdy efficiency has been supported by persistently spectacular quarterly outcomes and administration’s improved ahead steering.
The speedy adoption of integrative synthetic intelligence (AI) instruments by companies and people is driving a pointy enhance in demand for computing energy. To fulfill this rising want, hyperscalers are ramping up investments to broaden and improve their infrastructure, driving larger demand for Celestica’s services. On the similar time, the corporate continues to put money into innovation, together with the event of superior switches and storage options, additional strengthening its aggressive positioning.
Supported by these beneficial trade developments, Celestica’s administration expects income and adjusted earnings per share (EPS) to develop by 26.4% and 52%, respectively, in 2025, adopted by 31.1% progress in income and 39% progress in adjusted EPS in 2026. Regardless of its sturdy run, the inventory trades at an affordable next-12-month price-to-sales a number of of round 2.4, making Celestica a beautiful shopping for alternative for growth-oriented traders.
Waste Connections
My second decide is Waste Connections (TSX:WCN), a non-hazardous stable waste administration firm. It operates primarily in secondary and unique markets throughout the USA and Canada, the place it faces much less competitors and advantages from structurally larger margins.
Waste Connections has efficiently pursued a balanced technique of natural progress and disciplined acquisitions to broaden its footprint and improve monetary efficiency, thereby supporting sturdy long-term share worth appreciation. Over the previous 10 years, the corporate has delivered complete returns of greater than 440%, translating into a formidable annualized return of roughly 18.4%.
Wanting forward, administration expects to take care of an energetic acquisition technique, supported by a powerful steadiness sheet and sturdy free money circulation technology. The corporate additionally has a wholesome pipeline of personal acquisition targets throughout the USA and Canada that might collectively generate $5 billion in annualized income over time. In parallel, WCN continues to leverage superior applied sciences to enhance operational effectivity and profitability.
Moreover, lowering worker voluntary turnover amid improved worker engagement and strengthening security metrics are supporting margin enlargement. Given its resilient enterprise mannequin, regular progress profile, and defensive traits, WCN could be well-positioned to stabilize your portfolio.
Enbridge
My remaining decide is Enbridge (TSX:ENB), a high-quality dividend inventory that has elevated its dividend for 31 consecutive years and at the moment presents a beautiful yield of roughly 5.96%. As a diversified vitality infrastructure firm, Enbridge operates greater than 200 revenue-generating property and has minimal publicity to commodity worth fluctuations.
About 98% of Enbridge’s adjusted EBITDA (earnings earlier than curiosity, taxes, depreciation, and amortization) is generated from regulated property or long-term, contracted preparations, whereas roughly 80% of adjusted EBITDA is inflation-indexed. This extremely secure enterprise mannequin reduces sensitivity to financial cycles and market volatility, enabling the corporate to generate predictable, dependable money flows which have supported constant dividend progress over the many years.
Wanting forward, Enbridge is increasing its asset base by means of a $37 billion secured capital funding program, with tasks anticipated to enter service over the following 4 years. These investments may drive earnings and money circulation progress, positioning the corporate to return roughly $40–$45 billion to shareholders over the following 5 years. Taken collectively, Enbridge’s sturdy money flows, seen progress pipeline, and powerful shareholder returns make it a superb purchase for income-focused traders.
