The TSX-listed, Canadian stocks we’ve picked out have seen average revenue and net income growth of 14% and 47%, respectively, over the past three years
SmallCapPower | December 13, 2019: Revenue growth becomes a mechanism for companies to attract investors, acquire top talent, new technologies, additional product lines, or other companies, which leads to expansion, and even more growth for the business – a virtuous cycle. While revenue growth is one important aspect of a successful business, net-income growth gives investors a good snapshot of how efficiently companies can manage their operations and turn their revenue into profits, creating shareholder value. Typically, stocks with the best increases in share price have high revenue as well as net-income growth rates. Today we’ve identified four TSX-listed Canadian stocks that have seen double-digit revenue and net-income growth over the past three years. This has resulted in double-digit share price growth year to date.
*Share price data as at December 11, 2019, data obtained from S&P Capital IQ
**LTM Revenue & Net Income as of Q3/19 used as a proxy for F2019 in CAGR calculation
Cargojet Inc. (TSX:CJT) – $102.51
Air Freight and Logistics
Cargojet is Canada’s leading provider of time-sensitive overnight air cargo services and carries over 1,300,000 pounds of cargo each business night. CJT’s air cargo business activities include operation of domestic overnight air cargo co-load network between 14 cities in Canada, as well as provisions of dedicated aircraft to customers. CJT also operates scheduled international routes for various cargo customers between the U.S. and Bermuda, between Canada and Germany, and between Canada, Columbia, and Peru. Cargo Jet pays a quarterly dividend of $0.91, implying a 3.5% annual dividend yield.
- Market Cap: $1,374.4M
- YTD-Return: +44.8%
- F2019 (LTM) Revenue $479.5M
- F2016 Revenue: $331.0
- 3-Year Revenue CAGR: +13.1%
- F2019 (LTM) Net Income: $22.4M
- F2016 Net Income: $2.4M
- 3-Year Net Income CAGR: +110.5%
Kinaxis Inc. (TSX:KXS) – $104.91
Kinaxis is a vendor of SaaS solutions for supply-chain planning. Its software provides customers with a control tower view of their supply chains, highlighting issues that may affect their ability to meet customer demand. It also allows customers to perform scenario analysis, allowing them to determine the impact that different decisions might have on their operations. On October 31, 2019, Kinaxis reported Q3/19 financial results, highlighted by an 11% increase in quarterly revenue to $47.1M and EPS of $0.17. Q3 results beat the consensus estimate for revenue of $44.7M and $0.11 EPS.
- Market Cap: $2,751.5M
- YTD-Return: +58.6%
- F2019 (LTM) Revenue: $173.5M
- F2016 Revenue: $116.0M
- 3-Year Revenue CAGR: +14.4%
- F2019 (LTM) Net Income: $18.4M
- F2016 Net Income: $10.7M
- 3-Year Net Income CAGR: +19.7%
Badger Daylighting Ltd. (TSX:BAD) – $36.44
Construction and Engineering
Badger Daylighting provides North America with non-destructive excavating services. Typically, Badger works for contractors and facility owners in a diverse range of infrastructure industries. The Company utilizes its Badger Hydrovac technology for safe digging in congested grounds and challenging conditions. The Badger Hydrovac uses a pressurized water steam to liquefy the soil cover. The liquefied soil is then removed by a powerful vacuum system and deposited into a storage tank. The Company manufactures its truck-mounted hydrovac units. Badger Daylighting pays a quarterly dividend of $0.56, implying a 1.5% annual dividend yield.
- Market Cap: $1,281.0M
- YTD-Return: +13.0%
- F2019 (LTM) Revenue: $670.2M
- F2016 Revenue: $404.2M
- 3-Year Revenue CAGR: +18.4%
- F2019 (LTM) Net Income: $67.3M
- F2016 Net Income: $28.9M
- 3-Year Net Income CAGR: +32.5%
ATS Automation Tooling Systems Inc. (TSX:ATA) – $20.21
Industrial Machinery & Equipment
ATS Automation Tooling Systems is a Canada-based company, which is engaged in providing automation solutions. The Company provides custom automation, repeat automation, automation products and value-added services, including pre automation and after-sales services. ATS serves the automation systems’ needs of various customers in industries such as life sciences, computer and electronics, energy, transportation and consumer products. On November 6, 2019, ATS reported Q2/20 financial results, highlighted by a 20% increase in revenue YoY to $341.2M and EPS of $0.21. Q2/20 results beat the consensus estimate for revenue of $317.5M and was in-line with the EPS estimate of $0.21. ATS Automation pays a quarterly dividend of $0.72, implying a 3.6% annual dividend yield.
- Market Cap: $1,861.4M
- YTD-Return: +40.4%
- F2019 (LTM) Revenue: $1,350.5M
- F2016 Revenue: $1,039.6M
- 3-Year Revenue CAGR: +9.1%
- F2019 (LTM) Net Income: $79.1M
- F2016 Net Income: $39.6M
- 3-Year Net Income CAGR: +26.0%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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