Design Your Own Make America Great Again Hat

As someone who lives and breathes the Canadian way of life, I often go chosen on by InvestorPlace to write most Canadian stocks to buy.

Some obvious names that merchandise on the New York Stock Exchange or the Nasdaq come to mind. Many of them depend on America for much of their livelihood. It's why the latest U.S. election cycle has been mesmerizing boob tube for Canadian business executives.

In November, CEOs beyond Canada and those operating from within the U.S. were definitely sweating the details. Afterward all, when the U.S. sneezes, Canada catches a common cold.

Every bit professor Richard Leblanc notes, "There really isn't an industry that'south allowed from what happens south of the border . What goes on, goes right to the top very quickly." Leblanc teaches governance, law and ethics at York University in Toronto.

Well, Joe Biden won and Donald Trump lost. Canada will at present get gear up to see how the relationship shifts — and it always does later on a modify in presidents.

And then, for this article, I'm recommending seven Canadian stocks that generate a significant amount of their revenue in the United States. As the headline reads, each one could be considered the feather in America's hat.

• 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 Purchase: Lululemon (LULU)

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I think when I kickoff recommended this clothes brand back in August of 2016. I called LULU stock a acme l S&P 500 investment over the adjacent decade. The only problem was it wasn't part of the index — and still isn't.

At the time, Lululemon'due south sales in the U.Due south. accounted for over 60% of its fiscal 2015 revenue of $$2.1 billion (Page 61). In the company'due south fiscal year 2019, U.S. sales deemed for over 71% of its $4 billion in annual revenue.

Despite an increment in the percentage of sales generated in the U.South. over these four fiscal years, the company likewise did an first-class task of growing sales in its abode market place of Canada and overseas.

As big a deal as this pick of the Canadian stocks was 4 years ago, it's an even bigger deal today.

On Dec. x, it reported Q3 2020 sales that grew 22% year-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 exist materializing for most of apparel retail, Lululemon has bounced back from the weak offset to its year with a stunning set up of tertiary-quarter numbers […] Our information besides show that Lululemon has picked upwardly plenty of new shoppers, especially in womenswear."

And so, when it comes to retail, Lululemon is 1 of the best stocks to own — and information technology just happens to be run out of Vancouver.

Shopify (SHOP)

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

The reality is, though, that SHOP stock is having a good twelvemonth and (barring some major modify in consumer shopping habits) the visitor's eastward-commerce platform will remain in need for companies of all sizes.

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

"From a financial perspective, the company reported cash and equivalents of $six.i billion [as of the end of September]," Humayun wrote on Dec. 14. He added, "In addition, with improving operating leverage, I expect operating cash flows increase in the coming years. This will allow the company to continue aggressive investments in growth and enquiry and development."

The final fourth dimension I covered Store on a single-stock basis was in April, when it traded around $525. At the fourth dimension, I wondered if the stock would exist heading to $650 or back to $350 , where it 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 $ane,170 per share.

Heading into 2021, I don't know if SHOP volition double once more. However, solid returns definitely appear to be in the cards for this one of the Canadian stocks, given its business model's undeniable strength.

BRP (DOOO)

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BRP stands for Bombardier Recreational Products, but you probably better know its brands — Ski-Doo, Lynx, Bounding main-Doo, Can-Am, Alumacraft boats and more. While the company's heritage is in snowmobiles, it has also grown to go 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 1.67 billion CAD (over $1.31 billion), 1.9% college than in the same quarter a yr earlier. Withal, on the bottom line, information technology had operating profits of 284.3 million CAD (about $223 million), nearly 37% higher YOY.

Every bit a result of a more than assisting sales mix in fiscal 2021, the company is expected to grow its normalized earnings per share (EPS) by nigh 37% this year, despite an overall 1.iv% pass up in sales. Consumers are paying height dollar for its year-round products (ATVs, SSVs) and that'southward showing upwards on the income argument.

In November 2018, I recommended investors buy Po laris (NYSE: PII ), BRP's biggest rival . Correct now, it's upward marginally over the two-year menses. At the same time, DOOO stock is up 177% over the same period.

Equally it continues to gain global market share, I wait BRP to go on delivering strong double-digit returns for shareholders in 2021, earning its place on this list of the all-time Canadian stocks.

Enbridge (ENB)

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In 2019, Enbridge generated thirty.1 billion CAD ($23.6 billion) in the United States, bookkeeping for roughly 60% of its overall revenues (Page 120). In the past 2 fiscal years, ENB's sales in Canada have grown by x.4%. South of the border, all the same, they grew past a more robust 14.four% over the same menses. While that might not seem similar a big difference, when y'all're talking about over fifty billion CAD in annual revenue, it's noticeable.

Now, most of the Canadian stocks on this list are growth-oriented stocks. Merely Enbridge — whose energy infrastructure helps keep North America running — is a combination of value, growth and income.

On Dec. viii, the company declared a three% increase in its quarterly dividend to 83.5 cents CAD. The annualized dividend charge per unit of three.34 CAD yields a very salubrious vii.8%. Plus, with iii.95 billion CAD ($3.1 billion) in gratis cash flow over the past 12 months and growing at a healthy clip, ENB stock has enough of greenbacks to brand the almanac payments.

Its total return YTD is -16%. As long every bit the oil and gas industry continues to sputter, Enbridge might experience the same effect in 2021. Nonetheless, with the company expected to begin structure on the Line 3 pipeline project in Minnesota in the year ahead, Enbridge'southward growth plans are starting to wait upwardly.

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

Toronto-Dominion Bank (TD)

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It's not been a proficient year for most Canadian banks, although Toronto-Dominion'south virtually contempo quarterly results suggest the pandemic'due south wrath may be coming to an end. Recently, TD stock has come on in recent months, gaining over xviii% in the past three months lonely.

The bank reported its Q4 results on Dec. 3. On an adjusted basis, TD earned ii.97 billion CAD (over $2.32 billion) in cyberspace income, slightly higher than the two.95 billion CAD ($2.31 billion) it fabricated a year earlier. For the entire year, it earned 9.97 billion CAD (roughly $7.8 billion), a footling more than than 20% lower than the year earlier.

What'south more, Toronto-Rule'southward U.South. retail cyberbanking business accounted for roughly 30% of its overall internet income during the fourth quarter, raking in 871 million CAD ($658 one thousand thousand). Unfortunately, it was 27% lower than a yr earlier. However, its Canadian retail banking was iii% higher YOY.

The most of import figure in the bank'southward Q4 report, though, was the steep drop in its provision for credit losses, which roughshod to 971 1000000 CAD ($760 million) from 2.19 billion CAD ($1.72 billion) at the finish of the third quarter ending on July 31 (Page seven).

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

In one case the U.South. economy returns to normal, Toronto-Dominion's U.Southward. retail business ought to make a bigger contribution to the bank's bottom line. And, allow'southward not forget that the bank besides owns 13.v% of Charles Schwab (NYSE: SCHW ).

In the concurrently, bask its 4.3% dividend yield. Out of all of the Canadian stocks on the marketplace, TD is definitely a solid choice.

Thomson Reuters (TRI)

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Next on my list of some of the all-time Canadian stocks is TRI stock. In a challenging operating environment, Thomson Reuters reported excellent Q3 results on November. 3.

On the top line, sales grew past 2% 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% higher if you exclude currency.

In fiscal 2019, Thomson Reuters generated 79% of its $5.9 billion in revenue in the United States. Then, even though TRI is controlled by Canada's richest family — the Thomsons, who own 66% of the company'southward stock — much of the visitor's wealth has been earned in the U.Due south.

Recently, Thomson Reuters also completed a large-calibration migration of its business data services to AWS, Amazon'southward (NASDAQ: AMZN ) cloud-calculating service. The company's digital transformation will enable it to go a more agile business in the future. Equally office of the migration, it moved thousands of servers to AWS.

While I don't think you're going to hit a homerun owning TRI stock the same way yous volition with Shopify, you tin can't become wrong with this name if preservation of upper-case letter is important to you.

FirstService (FSV)

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Last on my listing of Canadian stocks is FirstService, a leader in outsourced belongings services in North America. It's definitely the smallest of the vii stocks listed in this commodity. Just what it lacks in visitor size, information technology makes upward for in outsized shareholder returns. So far in 2020, it's having a great year with a full render of over 41% YTD.

FSV is divided into ii operating segments : FirstService Residential, which manages residential communities, and FirstService Brands, a provider of "essential property services" similar painting, property damage restoration, flooring, closets and home inspections.

In the abaft 12 months ended Sep. 30, FSV had $2.67 billion in sales, 90% of which was generated in the United states of america. The rest was made in its home base of Canada. Employing approximately 24,000 people, it had abaft 12-months adapted EBITDA of $268 one thousand thousand, roughly 10% of its top-line sales.

In 1995, the visitor had $37 million in revenue. Some 24 years later in 2019, acquirement was $two.41 billion. That makes for a chemical compound annual growth rate of xix% (Folio v).

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

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

Will Ashworth has written about investments full-fourth dimension since 2008. Publications where he'south appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.Due south. 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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