My Top Canadian Stocks To Buy For Outsized Gains In 2024
I love the Canadian stock market. For all its talk about underperformance relative to the US markets, there are some stocks that have absolutely crushed it for many years.
The fact that I can scoop up similar companies at deeply discounted valuations relative to US peers allows me to spend my capital wisely. Many investors are abandoning the Canadian markets and flooding towards the United States as valuations sit at all time highs there, and rock-bottom lows here.
The fact you’re looking at this list today shows you understand that when Canadian stocks get cheap, it’s time to buy, not sell. Lets dig into 12 Canadian stocks I am bullish on moving forward.
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What are the best stocks to buy in Canada for 2024 and beyond?
- Agnico Eagle (TSE:AEM)
- National Bank (TSE:NA)
- Sunlife Financial (TSE:SLF)
- Telus (TSE:T)
- Hammond Power (TSE:HPS.A)
- Shopify (TSE:SHOP)
- Goeasy Ltd (TSE:GSY)
- TFI International (TSE:TFII)
- Loblaw (TSE:L)
- Dollarama (TSE:DOL)
- Canadian Natural Resources (TSE:CNQ)
- Royal Bank (TSE:RY)
12. Agnico Eagle (TSE:AEM)
Why I Love The Stock:
| Merger with Kirkland Lake working wonderfully |
| One of the most efficient gold producers in the country |
| Exposure to countries with heavy regulations leads to less disruptions |
| Strong price of gold a tailwind for future earnings growth |
| Despite a huge runup in price, valuations are still reasonable |
| Well covered, growing dividend |
As the markets and the economy continue to grapple with mixed results and disruptive macro events, the price of gold has ripped to all-time highs. Long considered a defensive position in times of uncertainty, those who have maintained their exposure to gold are no doubt glad they have.
Becuase of Agnico’s outstanding results, the company is now the largest gold producer in Canada with a market cap, outpacing Barrick Gold in terms of size.
What I find particularly attractive about Agnico Eagle (TSE:AEM) is that the company’s assets are located in what are largely considered safe jurisdictions. The company’s mines are in Canada, Mexico, Finland, and Australia.
As such, it has less geopolitical risk than its peers, and given the several issues miners have had globally in recent years, this type of risk is more prevalent than ever. One situation I can think of immediately is the Cobre Panama situation with First Quantum Minerals, which materially impacted First Quantum.
In 2023, Agnico produced more than 3.4 million gold ounces and had about 15 years of gold reserves at the end of the year. In 2024, it expects to produce around 3.5 million ounces.
Agnico Eagle is focused on increasing gold production in lower-risk jurisdictions. In 2023, it bought the remaining 50% of its Canadian Malartic mine, along with the Wasamac project and other assets, from Yamana Gold.
In my opinion, Detour Lake is a world-class mine with significant development potential. The company recently released a report in which it expects Detour to become a 1 million OZ producer in the coming years.
Agnico also pays an attractive and sustainable dividend. It has consistently paid a dividend since 1983, and while it has been kept steady this past year, it had grown the dividend for about a decade prior to that.
However, this was to be expected, given the company’s involvement in making some big deals in the past couple of years. I expect them to return to growth once they absorb those big asset purchases, especially considering the gold environment right now.
Having gold exposure is a good idea regardless of the environment. Targeting producers with a strong history of execution and an attractive asset base is key to success in this industry.
As it stands, Agnico operates one of the highest-quality businesses in the industry in my opinion.
11. National Bank (TSE:NA)
Why I Love The Stock:
| Canada’s fastest growing major bank |
| Exposure to Canada leads to heavier regulations and more reliable earnings |
| Its acquisition of Canadian Western gives it more exposure to Western Canada |
| One of the fastest growing dividends out of all Big 6 Banks |
| The most efficient bank in the country |
| Expected earnings growth is the fastest out of all major banks |
The National Bank (TSE:NA) is the sixth-largest bank in Canada by assets and one of the fastest-growing major institutions in the country.
Before National’s emergence, the “Big 5” banks dominated the Canadian financial space. However, National eventually grabbed the spotlight and the “Big 5” turned into the “Big 6”. It continues to grow at the fastest clip out of all major banks today.
The bank is primarily focused in Quebec and Ontario and is not as internationally diversified as some of the larger blue-chip institutions. However, it has made some wise international investments, primarily in Cambodia, that have generated significant earnings growth.
In addition to this, it has made a large scale acquisition of Canadian Western Bank. I love the acquisition, although I do believe it overpaid a bit.
Although not accretive to earnings until 2027, it should allow National Bank to unlock more value in western Canada. Because CWB was a smaller more regional bank, the acquisition by National should immediately open it up to more products, more loan offerings, and looser regulations.
The bank has a 14-year dividend growth streak, and its payout ratio is one of the healthiest among the major six banks, at only 45%. It is also the only Big 6 bank expected to post positive, double-digit earnings growth in 2025 as the Canadian economy weakens and consumers continue to pinch pennies.
Will it provide strong returns in moving forward? I’m not sure of that, as it could be tough sledding for Canada’s institutions.
However, all that will allow you to do is pick up an outstanding company at an attractive price, which should allow you to reap the rewards when the economy picks back up again.
10. Sunlife Financial (TSE:SLF)
Why I Love The Stock:
| Life insurance companies are currently in a large bull cycle |
| A buyback machine over the last half decade |
| Consistent earnings and dividend grower |
| Double digit returns on equity and invested capital |
| One of the largest names in the business |
| Exceptional balance sheet |
Sun Life Financial (TSE:SLF) provides life insurance, retirement, and asset management products to individuals and corporate customers in Canada, the United States, and Asia.
The company’s investment management business contributes approximately 30% of its adjusted earnings. As of the end of 2023, it had more than $1 trillion in assets under management. Although it is an international business, the majority of net earnings come from Canada, around 35%.
The company is a Canadian Dividend Aristocrat with nine years of dividend growth. I don’t expect this growth to slow anytime soon either, as the company is only paying out around 50% of earnings and 39% of cash flows toward the dividend at the time of writing.
This has allowed the company to grow the dividend at a nearly double-digit pace annually over the last five years. Although lower than its competitor, Manulife Financial, it is more consistent, as evidenced by its longer growth streak.
High rates are a tailwind for insurers, and the company should be able to operate well in our current environment. Yes, rates are coming down. However, they still remain elevated, and analysts expect mid to high single-digit earnings and revenue growth in 2025.
This certainly isn’t world-beating growth. However, we must remember that Sunlife Financial is a large-cap blue chip in Canada.
It has historically provided strong, double-digit annualized returns if you had reinvested the dividends over the last decade, along with lower overall volatility.
At only 10.5 times expected earnings at the time of writing, despite the company trading at a premium to historical averages, I would still view it as attractively valued.
9. Telus (TSE:T)
Why I Love The Stock:
| High interest rates have led to discounted valuations |
| The company is one of the best positioned telecoms for growth |
| Free cash flows are expected to grow significantly in the coming years |
| The company doesn’t own any media assets, which are losing profitability fast |
| One of the better positioned telecoms from a payout ratio standpoint |
| Expected to be the fastest growing telecom in Canada |
TELUS (TSE:T) is part of the Big 3 telecom companies here in Canada and is the stock you want to buy if you want exposure to a more pure-play telecom company.
Unlike Rogers Communications and BCE, TELUS doesn’t have a media division and instead has invested in business models that drive higher margins, like telehealth and security.
This should allow TELUS to not only grow its dividend but should also allow it to drive strong top and bottom-line growth.
The last five years have not been favourable to Canadian telecoms regarding growth. TELUS has only grown revenue by 7.5% annually over the previous five years, and earnings have actually dropped.
However, the environment has completely changed for these companies. Telecom infrastructure is difficult to construct and extremely costly. On the one hand, this is a massive benefit to a company like TELUS. Unless they’re willing to share towers, it creates an almost impenetrable barrier to entry.
On the other hand, however, it makes developing new infrastructure extremely expensive, and telecom companies often carry a large amount of debt.
Case in point: trying to keep pace when it comes to 5G development.
When interest rates are high, we can expect these companies to struggle. However, even as rates increase, they’re still at manageable levels for these companies. Most telecoms will likely scale back capital expenditures due to the rising rates. Still, TELUS should be able to continue to fuel growth even in this environment.
The company’s recent spinoff of TELUS International (TSE:TIXT) (now rebranded as TELUS Digital) has caused some turmoil with the stock. Because TELUS Communications is the controlling shareholder of TELUS Digital, struggles at TELUS Digital will have a corresponding impact on TELUS itself.
A stock that once had a large growth premium applied to it has watched that growth premium evaporate because of the hardships of its subsidiaries and rising rates. However, I’m still very bullish on this stock over the long term.
Analysts feel the same, predicting double-digit earnings growth for Telus and mid to high single-digit revenue growth over the next few years. This is the fastest expected growth rate of all 3 major telecom companies.
The company’s economic moat, pricing power, and being one of the best Canadian dividend stocks in the country make it a no-brainer on this list.
8. Hammond Power Solutions (TSE:HPS.A)
Why I Love The Stock:
| Strong exposure to growing infrastructure |
| 25%+ ROE and ROICs |
| Double digit growth expected moving forward |
| Valuations have come down to reasonable levels |
| Still a small cap, with a ton of room to grow |
| Should benefit from AI expansion |
Hammond Power (TSE:HPS:A) is a company that kind of came out of nowhere over the last few years. That is because the company has primarily benefitted from a large-scale ramp up in data centers and other AI developments.
Why? Because it produces electrical transformers and magnetic components like reactors and filters. Higher demand for energy ultimately means a higher demand for Hammond’s products.
It’s not only artificial intelligence, either. The company does plenty of work in the renewable energy space, along with commercial and industrial factories. However, in my opinion, data centers and the expansion of those in light of the rapid developments in AI is where the potential is with this company.
The company has 25%+ returns on equity and invested capital, and has some very reasonable margins considering the nature of the business. It carries practically no debt, and its balance sheet is outstanding.
The company is expected to grow earnings and revenue at a mid double digit pace over the next few years. So although the explosive growth is likely already priced in, I believe it should be able to grow inline with earnings at this point.
Despite its meteoric rise, the company is still a small cap, which could bring with it added volatility. Look no further than early 2024. The company went through a 33%+ drawdown, and fast. This one will require some patience, and a bit of heightened risk tolerance.
7. Shopify (TSE:SHOP)
Why I Love The Stock:
| Finally profitable |
| Large market share, and one that is growing |
| Post pandemic valuations are now reasonable |
| Company is signing multiple partnerships with major industry players |
| Double digit earnings growth expected |
| Innovation is bringing more and more businesses on board |
A list of top Canadian stocks wouldn’t be complete without the top-performing Canadian stock in recent memory, Shopify (TSE:SHOP). And yes, it’s still one of the best-performing Canadian stocks since its IPO, even after its catastrophic drawdown in late 2022.
Shopify offers an e-commerce platform primarily to small and medium businesses globally. It operates in two primary segments: subscription solutions and merchant solutions.
Subscription solutions allow subscribers (mostly merchants) to conduct business through Shopify’s tools. In contrast, merchant solutions help companies become more efficient via Shopify Payments, Shopify Shipping, and Shopify Capital.
Shopify was much higher on this list in the past. However, I’ve placed it more so in the middle of the list now. Why?
Despite growth being relatively solid, there is no doubt the company is getting hit a bit by a weak economy both here in Canada and the United States. It doesn’t have as much exposure to small and medium sized businesses as say Lightspeed Commerce does, but it still does have some.
Moving forward, until we are out of the weeds in terms of a potential recession and consumer spending picks back up, valuations are likely to remain lower.
I know this may sound crazy, as Shopify had a crazy 2023, crushing the market. However, it’s still a long way away from its 2022 highs because of a tech valuation reset, and is feeling the pinch of the consumer in 2024.
Does that mean you’ll regret a purchase of Shopify half a decade down the line? Absolutely not. And that’s exactly why I still love the company.
Shopify is trading at near the cheapest valuation in its history regarding enterprise value to revenue (EV/Revenue). The company would still be deemed “expensive” when we look at the general market. But overall, the only cheaper time in history to buy Shopify was during the bear market of 2022.
If you don’t have a quick trigger finger in terms of selling stocks, in my opinion, there will be few investors who are disappointed 5-7 years down the road if they bought Shopify even at these levels. Just be prepared for a lot of bumps in the road.
The company is still growing rapidly and has a large cash balance to reinvest in its business.
6. Goeasy Ltd (TSE:GSY)
Why I Love The Stock:
| Has survived numerous economic downturns |
| One of the best dividend growth companies in the country |
| Some of the best underwriters in the country |
| A weak economy is causing a surge in the sub-prime market |
| Highest levels of credit ratings among its borrowers in history |
| One of the best returns on equity in the finance sector |
Over the last half-decade, there’s been an emergence in a particular niche industry in the financial sector: alternative lenders. One of the best Canadian stocks in that niche? Goeasy Ltd (TSE:GSY).
Goeasy Ltd is a mid-cap Canadian stock that provides non-prime leasing and lending services through its easyhome and easyfinancial divisions. The company has issued $5+ billion in loans since its inception.
The company provides loans for a wide variety of products, including furniture, electronics, and appliances. Goeasy has become an attractive alternative for Canadians due to strict lending restrictions placed on Canada’s major financial institutions.
Many investors view Goeasy’s business model as predatory. If something doesn’t adhere to your principles, I’d certainly advocate not investing in it.
Much like tobacco or alcohol, some investors aren’t willing to support companies with such products. But you can’t deny that what Goeasy is doing is working, and it’s working well.
Part of the company’s surge is the struggle of many Canadians financially. As a result, they’re needing to tap into the sub-prime markets more and more.
A supporting number for this is that Goeasy’s customer credit ratings hit the highest levels in its company history. This isn’t as a result of improving credit ratings among its current customers. It is from higher credit customers having to access the sub-prime market to maintain their livelihoods.
Over the past decade, Goeasy has grown revenue at a 17%~ compound annual growth rate. The company has never had a year since 2001 when revenue was flat or lower than the year prior.
If we look towards recent years, from 2015 to 2020, the company doubled its revenue, and from 2021 to 2024, although growth has slowed, it is still strong and in the double digits. This confirms the fact that alternative lenders are catching on in a big way.
Even more impressive is the company’s earnings, as EPS over the past decade has grown at a pace of 26%~ annually. To grow net income at a compound annual rate of more than 25% over a decade highlights how strong this company has been.
The company is also growing its dividend at one of the fastest rates in the country. The company has a 35% 5-year annual dividend growth rate. It has raised dividends for nine consecutive years, including the most recent increase of 21.9%.
Overall, if you’re looking for a higher-risk but higher-reward play in the financial sector, I don’t think there is a better option than Goeasy Ltd.
5. TFI International (TSE:TFII)
Why I Love The Stock:
| The best positioned logistic company in North America |
| Has proven multiple times (2008, 2020) that it can operate in any environment |
| Strong growth by acquisition model is causing outsized growth |
| Online shopping will continue to fuel logistics companies and their earnings |
| Double-digit returns on invested capital |
| Some of the best margins in the business |
TFI International (TSE:TFII) is a stock I covered extensively at Stocktrades Premium, especially during the peak of the COVID-19 pandemic. The company has gone up more than 500% off those lows.
TFI is a trucking and logistics company. The company operates in four segments: Package and Courier, Less-Than-Truckload, Truckload, and Logistics. Along with 25,000 employees, it has over 620 terminals across North America.
The company has operations in the United States and Canada. Following its acquisition of UPS’s Less-Than-Truckload freight business in 2021, the bulk of its revenue, ~66%, comes from the US.
So why exactly am I still bullish on TFI today, despite the company trading near all-time highs share price wise?
First, strong management. During the midst of the COVID-19 pandemic, while many trucking and logistics companies were struggling mightily due to lockdowns, TFI International went to work.
It ended up purchasing Gusgo Transport, Fleetway Transport, CCC Transportation, APPS Transport, Keith Hall & Sons, the dry bulk assets of CT Transportation, the dry bulk assets of Grammer Logistics, the assets of MCT Transportation, DLS Worldwide, and the aforementioned UPS Freight business, all at crazy discounted values.
Yes, it’s a lot. CEO Alain Bedard was very busy putting a solid balance sheet to work. TFI took advantage of the situation and bought assets at discounted rates, highlighting the ability of its management, which looks to have set the company up to outperform for many years to come.
And as synergies from new acquisitions take hold, it will undoubtedly spur growth. The UPS Freight acquisition is transformational for the company. As mentioned, TFI International will now be more weighted towards business in the US, as opposed to the past when most revenues came from Canada.
When TFI International purchased UPS Freight, it was roughly breakeven, with margins of around 1%. Management has stated they will improve margins to 10%, which will provide significant earnings and revenue growth.
In the current economic climate, there is a chance that TFI could benefit from struggling trucking companies yet again. Yellow, a US trucking line and one that received hundreds of millions of dollars in bailouts from the US Government during the pandemic, went bankrupt as most of its assets were split up and sold to a variety of suiters.
Ultimately, this means more business for TFI, the expectation that freight rates will continue to rise, and profits.
This growth in profits should allow TFI International to continue growing its dividend. The company has a 13-year dividend growth streak and has raised dividends annually at a 16% clip over the last five years.
It doesn’t yield much, hovering around 1% or even sometimes sub-1%. Still, with the dividend payout ratio making up less than 20% of trailing earnings, it should have plenty of room to grow.
Do I fear a recession? Absolutely not. Although it would no doubt impact TFI’s share price, I’d be happy to accumulate more shares at discounted prices.
4. Loblaw (TSE:L)
Why I Love The Stock:
| The widest moat out of any Canadian grocer. Every Canadian is on average 10km away from a store |
| The strongest “discount” presence out of any Canadian grocer |
| Growing earnings and same stores sale at some impressive levels |
| Despite a huge runup in price, shares are still cheap |
| Boycotts have tried and failed. The company’s discount business model is very sticky |
| Excess cash flow generation will allow it to reinvest back into the business & expand infrastructure |
The main fear in 2024 and beyond is a recession, zero doubt. If this were to happen, we’d likely see more volatility in the equity markets. As a result, I want companies in my portfolio that can maintain revenue and earnings if an economic downturn does occur.
There arguably is no better company in the country to do so than Loblaw (TSE:L). Loblaw is one of Canada’s largest grocery, pharmacy, and general merchandise retailers, operating the most expansive store footprint in Ontario and maintaining sizable presences in provinces like Quebec and British Columbia.
Essential grocery banners include Loblaw, No Frills, and Maxi. At the same time, its pharmaceutical operations are the product of its 2014 acquisition of Shoppers Drug Mart. Regardless of the economic circumstances, humans need groceries. Without food and water, we don’t survive.
And when times get tough, we tend to pinch pennies. The distinct advantage Loblaw has is the fact it has a much higher “discount” element to it than other grocers like Empire Company and Metro, particularly its No Frills brand.
And although they have some intersection in products, another discount retailer like Dollarama is unlikely to take significant market share, as it doesn’t have fresh produce or a lot of other products.
The company also has one of the most significant economic moats of any grocer in the country. 90% of Canadians live within 10KMs of a Loblaw store.
This isn’t a flashy company by any stretch of the imagination. It doesn’t boast massive margins or large-scale growth. However, we witnessed during the bear market of 2022 that sometimes reliable cash flow takes priority over surging growth.
It pays dividends, typically in the low to mid 1% range. However, dividend growth is strong, with a 12-year dividend growth streak and mid-single-digit dividend growth on average over the last five years.
The company is expected to grow earnings in the mid-single-digit range over the next few years and revenue in the low single digits. I see it as a solid consumer defensive option in a volatile market.
3. Dollarama (TSE:DOL)
Why I Love The Stock:
| Rapid interest rate increases changed the way Canadians shop forever |
| The company absolutely crushes the competition margin-wise |
| The company is still putting up YoY growth despite very hard comparables in 2023 |
| Although valuations are high, they aren’t unreasonable |
| The company is showing no signs of slowing down in terms of expansion |
| Its simple business model allows it to maintain higher margins with less product inventory |
In the current economic climate, defensive stocks have gained much popularity. One of the country’s most prominent consumer defensive stocks is Dollarama (TSE:DOL).
Make no mistake though, this is a consumer defensive stock that has grown like a tech stock over the last couple years!
The company provides a broad range of everyday consumer products, general merchandise, and seasonal items, with merchandise at low fixed price points. General merchandise and consumer products jointly account for most of the company’s product offerings.
The company’s stores are throughout Canada, generally located in convenient locations, such as metropolitan areas, midsize cities, and small towns.
Its broad exposure and cheap product base make it perfect for Canadians looking to pinch pennies during poorer economic climates. This has undoubtedly been the case over the last few years, as the company is showing no signs of a slowdown despite many other retailers warning about slowdowns.
While many retailers warn of slowing growth, Dollarama is expected to continue its double-digit growth in 2025, even amid recessionary fears.
It is not seeing a slowdown in consumer activity, whatsoever. It’s even seeing a higher average basket price than pre-pandemic, suggesting many shoppers are potentially utilizing Dollarama over other stores for essential goods.
Analysts figure the company will grow revenue and earnings at a double-digit clip in both Fiscal 2025 and Fiscal 2026. At the time of writing, the stock is somewhat fully valued, in my opinion.
However, suppose it continues to perform, and other retailers lag. In that case, Dollarama may get even more interest from potential investors who want a safe-haven retailer during an economic downturn.
2. Canadian Natural Resources (TSE:CNQ)
Why I Love The Stock:
| The most efficient oil producer in the country |
| Strong mix of both oil and natural gas production |
| Its operations during the pandemic remove all concerns about potential events moving forward |
| Has a multi decade dividend growth streak |
| Has grown the dividend at a CAGR of 20%+ over that timeframe |
| Returns 100% of free cash flow back to investors via dividends and buybacks |
It’s been a very long time since we’ve included a cyclical option on our list of top Canadian stocks to buy. But there is no doubt oil is making a resurgence, and although oil has dipped in 2024, I believe prices are going to stabilize a bit going forward.
If I’m looking to make an investment based on oil, I like to own the best-in-class producer in North America. I believe that producer to be Canadian Natural Resources (TSE:CNQ).
Look back over the last ten years, and you’ll be hard-pressed to find a better-performing major oil stock than Canadian Natural Resources.
Oil stocks lagged the broader market for a very long time. In fact, most still do. But now that oil has made a comeback, Canadian Natural has risen from the ashes and become one of the best-performing stocks on the TSX Composite Index.
Canadian Natural is one of the most efficient companies in the industry. With breakeven prices in the $30 WTI range, the company can maintain positive cash flows in almost every environment.
Despite oil prices seeing one of the largest collapses in their history in 2020, Canadian Natural still produced over $2.2B in free cash flow in Fiscal 2020.
For this reason, the company was not only able to maintain the dividend in 2020, but while other major producers like Suncor Energy were cutting their payouts, Canadian Natural Resources came through with a dividend raise to extend its multi-decade dividend growth streak.
If this doesn’t tell you something about the company’s operations in practically any environment, it should. It was raising the dividend during a global oil collapse.
Canadian Natural and investors stand to benefit if WTI prices can be maintained at the $60+ range over the next 2-3 years. Although the “home run” style price levels are likely long past us, don’t make this the reason you ignore Canadian Natural right now. The company still has upside potential in terms of the share price.
The most attractive thesis for the company is its dividend and share buybacks. Now that net debt is paid down to below $10B, it will return 100% of its free cash flow back to shareholders via dividends and buybacks. This is a very attractive proposition for investors from a company flush with cash.
Cyclical options are typically not long-term holds, but I’d make an exception here for Canadian Natural. I do believe this is a company you can simply buy and hold in your portfolio for decades.
The shift to renewable energy is very real, and many investors are concerned with the longevity of the oil and gas industry.
For this reason, many investors expect oil companies to return cash flow to investors in the form of dividends or share buybacks instead of spending cash flow on expansion.
This should result in some hefty dividend increases and share appreciation via buybacks. These two reasons are precisely why Canadian Natural has cracked my top 3 best Canadian stocks to buy in 2024 and beyond.
1. Royal Bank of Canada (TSE:RY)
Why I Love The Stock:
| Exposure to 40 different countries |
| One of the best underwriting teams of all major institutions |
| One of the strongest brands in the country |
| Despite tough challenges, continues to grow earnings in 2024 |
| Some of the best payout ratios out of all Big 6 Banks |
| Has navigated the economic downturn wonderfully |
It felt weird including The Royal Bank of Canada (TSE:RY) on this list because it is primarily a list of growth stocks. However, I felt this Canadian bank stock is too good right now not to be included on a list of the best stocks to buy in Canada.
Royal Bank is a global enterprise with operations in Canada, the United States, and, as you’ll see the importance of later, 40 other countries. When it comes to international banking, there isn’t a bank with more exposure.
It is also a well-diversified bank with personal, commercial, wealth management, insurance, corporate, and capital market services.
The company has been Canada’s most valuable brand for six-plus years and is also currently the largest bank in the country.
It lost its title of Canada’s largest company to Shopify during the tech frenzy in 2020 and 2021. But, as it has done for a very long time, it regained its crown at the start of 2022 with a market capitalization of over $200B and has kept it ever since.
Over the last five years, the company has grown revenue and earnings by mid-single digits on average —not bad for the largest company in the country. With a dividend yield in the 4% range and a 13-year dividend growth streak, RBC is one of the best dividend payers in the country.
Royal is also excelling due to its exposure to the Canadian economy. Because the Bank of Canada lowered rates before the Federal Reserve, many banks that had exposure to US operations struggled, while many banks that have outsized Canadian exposure thrived.
The Canadian economy is being surprisingly resilient, and I feel it will continue to excel as rates come down, discretionary spend starts again, and consumers start borrowing. For that reason, I’d want to own what I feel is the best-in-class financial institution, Royal Bank.