The TSX-listed Canadian stocks we’ve discovered had a spectacular 2019 and this could continue into 2020, based on solid EPS growth over the past three years
SmallCapPower | December 30, 2019: The S&P TSX Composite Index closed at an all-time high of 17,180.15 on December 24, 2019, returning 20% year to date. This year’s top-performing sectors on the TSX included Airlines, Utilities, Financials, and Technology, which returned 66.2%, 59.3%, 46.7%, and 25.9%, respectively. Today we’ve uncovered five TSX-listed Canadian stocks from the above-listed sectors, whose rally could last into 2020 based on strong three-year historical EPS growth.
*Share price data as at December 24, 2019, data obtained from S&P Capital IQ
Equitable Group Inc. (TSX:EQB) – $111.04
Financial Services
Equitable Group operates as a Schedule I bank that offers a variety of residential lending, commercial lending and saving solutions. The Company’s deposit products include GICs, high-interest savings accounts and deposit notes. The Company utilizes a branchless approach, instead working with mortgage brokers, deposit agents and financial planners. Equitable Group announced in July that it will increase its dividend 22% beginning in September, which is keeping with its commitment to grow Equitable’s dividend at a rate of between 20% to 25% in each of the next five years.
- Market Cap: $1,859.2M
- 30-Day Return: -0.5%
- YTD-Return: +87.4%
- 30-Day Average Trading Volume: 33,560
- 3-Year EPS CAGR: +12.2%
Kinaxis Inc. (TSX:KXS) – $101.27
Technology – SaaS
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: $2,656.0M
- 30-Day Return: -6.2%
- YTD-Return: +52.5%
- 30-Day Average Trading Volume: 61,190
- 3-Year EPS CAGR: +19.8%
Cargojet Inc. (TSX:CJT) – $106.16
Airlines – Freight
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 the 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. Cargojet pays a quarterly dividend of $0.91, implying a 3.5% annual dividend yield.
- Market Cap: $1,424.9M
- 30-Day Return: +6.4%
- YTD-Return: +48.6%
- 30-Day Average Trading Volume: 38,640
- 3-Year EPS CAGR: +109.2%
Enghouse Systems Limited (TSX:ENGH) – $49.11
Technology
Enghouse Systems develops and sells enterprise-oriented applications software worldwide. The Company operates through two main business segments: Interactive Management Group and Asset Management Group. The Interactive Management Group segment provides customer interaction software and services. Its technologies include contact center, attendant console, interactive voice response, dialers, agent performance optimization, and analytics that support various telephony environments. The Asset Management Group segment offers a portfolio of products to telecom service providers, utilities, and the oil and gas industry. Its products include operations support systems, business support systems, and mobile value-added services solutions, as well as data conversion services.
- Market Cap: $2,688.2M
- 30-Day Return: +13.9%
- YTD-Return: +46.0%
- 30-Day Average Trading Volume: 130,090
- 3-Year EPS CAGR: +14.0%
Hammond Power Solutions Inc. (TSX:HPS.A) – $7.69
Electrical Equipment and Utilities
Hammond Power Solutions is a Canada-based manufacturer of dry-type magnetics. The Company is engaged in the design and manufacture of custom electrical engineered magnetics. Hammond Power is also a manufacturer of standard electrical dry-type, cast resin and liquid-filled transformers. HPS Standard Products are available across over four categories, which include control and automation; low voltage distribution; medium voltage distribution, and potted and specialty. HPS also offers original equipment manufacturers (OEM) a set of products and services. The Company has manufacturing plants in Canada, the United States, Mexico, Italy and India.
- Market Cap: $90.3M
- 30-Day Return: -1.5%
- YTD-Return: +35.1%
- 30-Day Average Trading Volume: 2,000
- 3-Year EPS CAGR: +35.1%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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