{"id":148759,"date":"2025-09-16T20:03:22","date_gmt":"2025-09-16T20:03:22","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/148759\/"},"modified":"2025-09-16T20:03:22","modified_gmt":"2025-09-16T20:03:22","slug":"11-industry-leaders-to-weather-the-weaker-canadian-economy","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/148759\/","title":{"rendered":"11 industry leaders to weather the weaker Canadian economy"},"content":{"rendered":"

What are we looking for?<\/p>\n

Companies that have demonstrated leadership in their industry and sustained efficiency, and that have growth and value characteristics. <\/p>\n

With unemployment rising and Bank of Canada signalling potential interest rate cuts, a weaker macroeconomic environment will likely benefit resilient industry leaders, particularly those in non-cyclical sectors. By targeting businesses that consistently generate above-average return on capital (ROC) and higher gross margins than their industries, we capture high-quality compounders and efficient capital managers. <\/p>\n

The screen<\/p>\n

We screened the Canadian stock universe, excluding the energy, consumer discretionary and materials sectors, using the following criteria:<\/p>\n

We ranked companies based on their excess gross margin relative to their industry, three-year average ROC, five-year ROC growth and their enterprise-value-to-EBITDA ratio (EV\/earnings before interest, taxes, depreciation and amortization), and retained the top 33 per cent of companies in the universe;Positive gross margin relative to the average in their industry; Five-year average ROC growth must be positive; Market capitalization greater than $5-billion.<\/p>\n

For informational purposes, we also added gross margin, industry gross margin, and each company\u2019s price-to-earnings ratio, one-year price return and dividend yield.<\/p>\n

More about Inovestor<\/p>\n

For 25 years as a pioneering Canadian fintech, Inovestor has consistently pushed the boundaries to empower investment advisers with advanced, easy-to-use investment strategies. Discover more about our journey and offerings on our website<\/a>.<\/p>\n

What we found<\/p>\n

Industry leaders<\/p>\n

Toromont Industries Ltd. (TIH-T<\/a>) provides specialized capital equipment and ranks at the top of our list, with a three-year average ROC of 20.3 per cent. The company maintains a reasonable valuation for an industry leader, with an EV\/EBITDA of 13.6 and a P\/E of 25.3. Toromont has proven to be a compounder, with growing ROC and a reasonable valuation for an industry leader, making it an attractive blend of growth and reasonable value, particularly in a declining-interest-rate environment that could support increased construction activity.<\/p>\n

Stantec Inc. (STN-T<\/a>) is a professional services firm that specializes in infrastructure, offering evaluation, planning and design solutions. The company reports a gross margin of 54.4 per cent, significantly above the industry median of 15.4 per cent, a 39-point advantage. Stantec also delivers the second-highest ROC in our screen at 16 per cent. Reflecting these strong fundamentals, it trades at the second-highest EV\/EBITDA multiple of our screen at 16.2. Overall, Stantec stands out as a leader in the infrastructure engineering sector, and its prospects could be further supported if Prime Minister Mark Carney pushes forward large-scale infrastructure projects.<\/p>\n

Loblaw Cos. Ltd. (L-T<\/a>) is a leading grocery and pharmacy retailer and the largest company by market capitalization in our screen. It has achieved solid ROC growth of 8.9 per cent and maintains a gross profit margin four percentage points above the industry average. With an EV\/EBITDA of 11.4, Loblaw offers a compelling entry point into the consumer staples sector, particularly given the current weak macroeconomic environment.<\/p>\n

Investors are advised to do further research before investing in any of the companies listed in the accompanying table.<\/p>\n<\/p>\n

For more details about these stocks, subscribe to the Inovestor for Advisors platform for free.<\/p>\n

Anthony M\u00e9nard, CFA, is vice-president of data management at Inovestor.<\/p>\n","protected":false},"excerpt":{"rendered":"What are we looking for? Companies that have demonstrated leadership in their industry and sustained efficiency, and that…\n","protected":false},"author":2,"featured_media":120670,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[45,49,48,46,79215,79216],"class_list":{"0":"post-148759","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-ca","10":"tag-canada","11":"tag-economy","12":"tag-noapple","13":"tag-noapplenews"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/148759","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=148759"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/148759\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/120670"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=148759"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=148759"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=148759"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}