The Canadian stocks we’ve identified have been quietly moving higher of late
SmallCapPower | June 22, 2020: Growth investors often look to stock-price momentum as a sign of future gains, at least in the short term. Today we have sifted through and found two lesser-known Canadian stocks experiencing the greatest momentum of late.
*Returns are based on closing stock prices as of June 18, 2020
The North West Company Inc. (TSX:NWC) – $30.63
North West Company is a retailer of food and everyday products and services to rural communities and urban neighbourhoods in Canada, Alaska, the South Pacific and the Caribbean. North West operates 250 stores under the trading names Northern, NorthMart, Giant Tiger, Alaska Commercial Company, Cost-U-Less and RiteWay Food Markets and has annualized sales of about C$2.0 billion. On June 10, 2020, the Company reported first-quarter fiscal 2021 revenue of $592.6-million, beating Bay Street’s expectation of $509 million, while same-store sales climbed 15.5%. Adjusted EBITDA, meanwhile, surged 33% year over year to $59.8 million. North West Company attributed the stellar financial results to lower prices aimed at increasing market share, local shopping, and government support payments. NWC stock has a current dividend yield of 4.4%.
- Year-to-Date Return: 16%
Enghouse Systems Limited (TSX:ENGH) – $70.15
Enghouse Systems provides enterprise software solutions and has grown through a ‘roll-up’ strategy, typically spending between $20 million to $40 million a year on acquisitions of good-quality software assets at bargain prices, which are used in contact centres, telecommunication networks, transportation systems and for video conferencing. On June 4, 2020, Enghouse reported better-than-expected Q2 2020 revenue of $140.9-million, up 58% year over year, while net earnings per share of $0.49 also surpassed expectations, surging 64% from a year earlier. Driving second-quarter results was its video conferencing division, Vidyo Inc, which enables healthcare organizations, mostly in the United States, to hold video appointments with patients over the Internet, as well as allowing banks to meet virtually with customers. ENGH stock has a current dividend yield of 0.8% and the Company has increased its dividend for 12 straight years.
- Year-to-Date Return: 46%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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