Make America Great Again Hat in California

As someone who lives and breathes the Canadian mode of life, I oftentimes get chosen on by InvestorPlace to write about Canadian stocks to purchase.

Some obvious names that trade on the New York Stock Commutation or the Nasdaq come to mind. Many of them depend on America for much of their livelihood. Information technology's why the latest U.S. ballot bike has been mesmerizing boob tube for Canadian business organisation executives.

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

As professor Richard Leblanc notes, "At that place really isn't an industry that's immune from what happens south of the border . What goes on, goes correct to the top very quickly." Leblanc teaches governance, constabulary and ethics at York University in Toronto.

Well, Joe Biden won and Donald Trump lost. Canada will now become gear up to come across how the relationship shifts — and it always does after a alter in presidents.

So, for this article, I'm recommending seven Canadian stocks that generate a meaning amount of their acquirement in the United States. As the headline reads, each one could exist considered the plume 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 Buy: Lululemon (LULU)

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I call back when I first recommended this apparel brand dorsum in August of 2016. I called LULU stock a top 50 S&P 500 investment over the side by side decade. The but problem was it wasn't part of the index — and still isn't.

At the fourth dimension, Lululemon's sales in the U.South. accounted for over lx% of its fiscal 2022 revenue of $$2.i billion (Folio 61). In the company'south fiscal year 2019, U.South. sales accounted for over 71% of its $4 billion in annual acquirement.

Despite an increase in the percentage of sales generated in the U.S. over these four fiscal years, the visitor besides did an fantabulous job of growing sales in its abode market of Canada and overseas.

Every bit large a deal every bit this pick of the Canadian stocks was four years agone, it's an even bigger deal today.

On December. 10, information technology reported Q3 2020 sales that grew 22% year-over-yr (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 most of clothes retail, Lululemon has bounced dorsum from the weak starting time to its year with a stunning set of tertiary-quarter numbers […] Our information as well bear witness that Lululemon has picked up plenty of new shoppers, especially in womenswear."

So, when information technology comes to retail, Lululemon is one of the all-time stocks to own — and it merely 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 yr-to-engagement (YTD) total return of 195% through Dec. xviii — seems almost pedestrian.

The reality is, though, that Store stock is having a adept year and (barring some major change in consumer shopping habits) the company's e-commerce platform will remain in demand for companies of all sizes.

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

"From a financial perspective, the company reported greenbacks and equivalents of $half dozen.one billion [as of the end 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 allow the company to go along ambitious investments in growth and enquiry and development."

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

I concluded that if yous were belongings Shopify stock for the long haul — say 2-three years — buying in the $500s wasn't a bad call. Now, information technology has doubled from April prices to over $one,170 per share.

Heading into 2021, I don't know if Shop volition double over again. However, solid returns definitely announced 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 ameliorate know its brands — Ski-Doo, Lynx, Bounding main-Doo, Can-Am, Alumacraft boats and more than. While the visitor'southward heritage is in snowmobiles, it has also grown to go a large seller of all-terrain vehicles (ATVs) and side-past-side vehicles (SSVs).

In the 3rd quarter concluded October. 31, BRP had sales of over i.67 billion CAD (over $1.31 billion), 1.9% higher than in the same quarter a yr earlier. However, on the bottom line, it had operating profits of 284.3 one thousand thousand CAD (most $223 million), almost 37% higher YOY.

As a result of a more than profitable sales mix in financial 2021, the company is expected to grow its normalized earnings per share (EPS) by almost 37% this yr, despite an overall one.iv% reject in sales. Consumers are paying elevation dollar for its yr-round products (ATVs, SSVs) and that'due south showing upward on the income statement.

In Nov 2018, I recommended investors buy Po laris (NYSE: PII ), BRP's biggest rival . Right at present, it's up marginally over the ii-year menses. At the same time, DOOO stock is up 177% over the same period.

As information technology continues to gain global market share, I expect BRP to keep delivering strong double-digit returns for shareholders in 2021, earning its place on this list of the best Canadian stocks.

Enbridge (ENB)

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In 2019, Enbridge generated 30.1 billion CAD ($23.6 billion) in the United States, accounting for roughly 60% of its overall revenues (Folio 120). In the past two fiscal years, ENB'due south sales in Canada have grown past 10.four%. South of the edge, however, they grew by a more robust xiv.4% over the same menstruum. While that might non seem like a big difference, when y'all're talking virtually over fifty billion CAD in annual acquirement, it's noticeable.

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

On Dec. 8, the company declared a 3% increment in its quarterly dividend to 83.5 cents CAD. The annualized dividend charge per unit of three.34 CAD yields a very healthy seven.8%. Plus, with iii.95 billion CAD ($three.i 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 render YTD is -xvi%. As long every bit the oil and gas industry continues to sputter, Enbridge might experience the same consequence in 2021. Nevertheless, with the company expected to brainstorm construction on the Line three pipeline project in Minnesota in the yr ahead, Enbridge'south growth plans are starting to look up.

So, become paid by waiting on Enbridge to inevitably abound its concern south of the border.

Toronto-Rule Banking company (TD)

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Information technology's not been a good year for most Canadian banks, although Toronto-Dominion'due south most recent quarterly results propose the pandemic'due south wrath may be coming to an end. Recently, TD stock has come on in recent months, gaining over 18% in the past 3 months alone.

The bank reported its Q4 results on Dec. 3. On an adjusted basis, TD earned ii.97 billion CAD (over $2.32 billion) in net income, slightly higher than the 2.95 billion CAD ($2.31 billion) information technology made a year earlier. For the entire year, it earned ix.97 billion CAD (roughly $7.viii billion), a little more than than 20% lower than the year before.

What'south more than, Toronto-Rule's U.S. retail banking concern accounted for roughly 30% of its overall internet income during the fourth quarter, raking in 871 million CAD ($658 million). Unfortunately, information technology was 27% lower than a twelvemonth before. Even so, its Canadian retail banking was iii% higher YOY.

The most of import effigy in the banking company'southward Q4 report, though, was the steep drop in its provision for credit losses, which fell to 971 million CAD ($760 million) from 2.19 billion CAD ($1.72 billion) at the end of the third quarter ending on July 31 (Folio 7).

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

In one case the U.S. economy returns to normal, Toronto-Dominion's U.Due south. retail business ought to brand a bigger contribution to the depository financial institution's bottom line. And, let's not forget that the bank also owns thirteen.5% of Charles Schwab (NYSE: SCHW ).

In the meantime, enjoy its 4.three% dividend yield. Out of all of the Canadian stocks on the marketplace, TD is definitely a solid pick.

Thomson Reuters (TRI)

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Adjacent on my listing of some of the all-time Canadian stocks is TRI stock. In a challenging operating surroundings, Thomson Reuters reported splendid Q3 results on Nov. 3.

On the top line, sales grew by 2% during the quarter to $1.44 billion — and three% if you exclude currency. On the bottom line, it earned 39 cents a share, 44% college than a yr earlier and 48% higher if you exclude currency.

In financial 2019, Thomson Reuters generated 79% of its $5.nine billion in revenue in the U.s.. Then, fifty-fifty though TRI is controlled past Canada's richest family — the Thomsons, who own 66% of the company's stock — much of the company's wealth has been earned in the U.Due south.

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

While I don't think you're going to hitting a homerun owning TRI stock the same manner you lot will with Shopify, you tin can't go wrong with this name if preservation of capital letter is important to you.

FirstService (FSV)

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Last on my listing of Canadian stocks is FirstService, a leader in outsourced property services in North America. It's definitely the smallest of the seven stocks listed in this article. Merely what it lacks in company size, it makes up for in outsized shareholder returns. So far in 2020, information technology's having a peachy year with a total render of over 41% YTD.

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

In the trailing 12 months ended Sep. 30, FSV had $2.67 billion in sales, ninety% of which was generated in the United States. The rest was fabricated in its dwelling house base of Canada. Employing approximately 24,000 people, it had trailing 12-months adjusted EBITDA of $268 1000000, roughly 10% of its top-line sales.

In 1995, the company had $37 million in revenue. Some 24 years afterwards in 2019, revenue was $2.41 billion. That makes for a compound almanac growth rate of xix% (Page 5).

Yous can't go wrong with businesses that make or relieve customers time and money. FirstService does both. Information technology's an fantabulous long-term purchase.

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 about investments total-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 time. 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/