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Written by Amy Legate-Wolfe at The Motley Fool Canada
The TSX30 was just announced and investors across Canada were quick to look at what companies made the cut. Yet today, we’re not going to provide you with a simple list. No, we’re going right to the top. We’ll see which two Canadian companies made it to the very tippity top of the list. And more importantly, why?
The number one spot this year went to investment-household name Celestica (TSX:CLS). Its shares surged by 380% in the last year alone! The company is a direct beneficiary of investment into communications, the cloud, and artificial intelligence through its server builds. The supply chain solutions company has continued to beat out earnings quarter after quarter, reflecting durable demand in electronics manufacturing services (EMS). So let’s look at those recent earnings.
During the second quarter, the company reported revenue rising 21% year over year, exceeding the high end of its guidance. Adjusted earnings per share (EPS) hit $1.39 compared to $0.90 last year, with connectivity and cloud solutions revenue rising 28%. The quarter was so good in fact that management raised the 2025 annual revenue outlook to $11.55 billion from $10.85 billion, with adjusted EPS to $5.50.
The second spot on the TSX today went to Lundin Gold (TSX:LUG), as the gold miner’s share price surged by 192% in the last year as of writing. The company has been shown the love thanks to its ability to take the gold commodity and convert it into higher spot prices, with record cash flow and capital returns. So not only is it benefitting from a higher price in gold, but strong operating metrics as well.
This was seen during the gold stock’s second quarter, with the TSX stock reporting record revenue at $453 million and net income at $196.7 million. Furthermore, there was a huge lift in gold produced and sold, especially at a realized price of $3.36 per ounce per quarter. And again, the company raised its guidance, along with Celestica, expecting between 490,000 to 525,000 ounces of gold produced.
So what’s fuelling the power behind both of these companies? Sure, there are surges in AI stocks and gold, but it’s more than that. Both TSX stocks have shown a demonstrable conversion of demand into profits and cash. Lundin now holds large cash dividends, with Celestica paying back shareholders through buybacks. Furthermore, upward revisions continue to make the stocks look attractive.
But we can’t ignore the macro market context. Lundin’s realized gold price is the single largest macro input to drive record results, and the price of gold is now nearing US$4,000 per ounce. Furthermore, Celestica’s strong hardware platform growth shows even more demand for server and storage from hyperscalers and telecom. Together, these companies are rising higher on the backs of market drivers, and doing it well.
Of course what goes up this quick could go down, but again there’s a reason for the momentum. While there are risks from shares surging as they have, with neither stock looking exactly cheap, the companies have also used the rise to their advantage. The TSX stocks both use the cash to reward shareholders and save for a rainy day. Therefore, together these are strong companies only getting stronger by beating out record results through a combination of micro and macro narratives. So it’s clear not only why these companies are at the top of the TSX today, but also why they might stay there.
The post TSX30’s Top Stocks: Who’s Dominating Canada’s Market Rally appeared first on The Motley Fool Canada.
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Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Celestica. The Motley Fool has a disclosure policy.
2025