Kalkine Media explores 5 TSX Industrial stocks to watch this quarter

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 Kalkine Media explores 5 TSX Industrial stocks to watch this quarter
Image source: © Talithait | Megapixl.com

Highlights

  • In Q3 2022, Thomas Reuters’ revenue was US$ 1,574 million.
  • Waste Connections’ operating income in Q3 2022 was US$ 326.76 million.
  • On October 1, 2022, WSP’s adjusted EBITDA was C$ 407 million.

Canada's industrial sector is vast which includes equipment, machinery, construction supplies, and manufacturing. All these segments have a direct relation to economic conditions. During different economic phases, every sub-sector performs in different directions.

With the ebbing of the pandemic, there might be some recovery in the sector. However, factors like inflation and rising interest rates have adversely affected the sector and brought in some fluctuations.

Amid the uncertainties, the S&P/TSX Capped Industrials Index jumped by 8.496 per cent QTD (quarter-to-date). As an investor, look for the right opportunities and capitalize on them at the right time.

For your portfolio, have a strategy that solves the dual purpose of risk mitigation as well as gains maximization. Focus on the company financials as well. It gives a vantage view of the stock market.

Here we assess five stocks and explore their recent financial highlights:

  1. Thomson Reuters Corporation (TSX: TRI)

Thomson Reuters Corporation is a product of the merger of Thomson (Canada) and Reuters Group (the UK).

In Q3 2022, Thomas Reuters’ revenue increased to US$ 1,574 million compared to US$ 1,526 million in the year-ago quarter. The operating profit also rose to US$ 398 million from US$ 282 million for the same comparable period. The adjusted EBITDA also jumped to US$ 535 million from US$ 458 million.

Thomson Reuters distributed a quarterly dividend of US$ 0.445 per share. It reported a dividend yield of 1.626 per cent along with three-year dividend growth of 3.22 per cent. 

On November 11, 2022, the company entered into a definitive agreement to acquire SurePrep, LLC.

  1. Waste Connections Inc. (TSX: WCN)

Waste Connections provides integrated solid waste and recycling services in North America. The company serves industrial, residential, and commercial markets and operates recycling operations, landfills, and transfer stations.

In Q3 2022, Waste Connections’ operating income soared to US$ 326.76 million from US$ 285.14 million in Q3 2021. The revenue also increased to US$ 1,879.86 million from US$ 1,597.16 million in the same comparable period. The net income grew to US$ 237.12 million from US$ 114.65 million.

The total assets of the company grew to US$ 16,130.66 million from US$ 14,699.92 million for the same comparable period. Waste Connections distributed a dividend of US$ 0.255 per share and reported a dividend yield of 0.751 per cent. The company noted its five-year dividend growth at 13.81 per cent.

  1. WSP Global Inc. (TSX: WSP)

WSP Global caters to power and energy, property buildings, and strategic advisory services. As on October 1, 2022, WSP’s revenue rose to C$ 2,896.1 million from C$ 2,650.2 million noted as on September 25, 2021.

The adjusted EBITDA of the company also grew to C$ 407 million from C$ 377.7 million for the same comparable period. Meanwhile, the net earnings declined to C$ 129.1 million from C$ 139.2 million.

The company’s total assets rose to C$ 14,466 million from C$ 11,250.4 million in the same comprable period. The quarterly dividend per share of the company is C$ 0.375 and it has a dividend yield of 0.942 per cent. 

On September 23, 2022, WSP Global acquired GL Hearn Ltd and Capita Real Estate and Infrastructure Ltd.

The total market capitalization of TRI, WCN, WSP, CNR, and CP:

  1. Canadian National Railway Company (TSX: CNR)

Canadian National Railway Company spans from Chicago to the Gulf of Mexico. In Q3 2022, Canadian National Railway’s total revenue was reported at C$ 4,513 million versus C$ 3,591 million in the year-ago quarter. The operating income also rose to C$ 1,932 million from C$ 1,341 million for the same comparative period.

The net income saw a decline and was noted at C$ 1,455 million compared to C$ 1,686 million in the year-ago quarter.

The free cash flow (FCF) also grew to C$ 1,356 million from C$ 754 million. The adjusted EBITDA of the company rose to C$ 8,328 million from C$ 7,201 million. The company has a dividend yield of 1.779 per cent. It distributed a quarterly dividend per share of C$ 0.733.

  1. Canadian Pacific Railway Limited (TSX: CP)

Canadian Pacific Railway Limited operates across covering more than 12,500 miles of track. In Q3 2022, Canadian pacific reported its total revenues at C$ 2,312 million compared to C$ 1,942 million in the previous year’s same quarter.

The total operating expenses rose to C$ 1,375 million from C$ 1,168 million for the same comparable period. Simultaneously, the operating income grew to C$ 937 million from C$ 774 million. The net income of the company soared to C$ 774 million from C$ 472 million.

As on September 30, 2022, the cash and cash equivalents rose to C$ 138 million from C$ 69 million on December 31, 2022. With a three-year dividend growth of 14.19 per cent, the company announced a dividend per share of C$ 0.19 every quarter. The P/E (price-to-earnings) ratio is 33 and the EPS is C$ 3.13.

On November 17, 2022, Canadian Pacific’s stock price was C$ 103.57 with an increase of 9.9 per cent within 12 months. 

Bottom Line

While going for stock selection, consider all the parameters and analyze them carefully. Certain stocks may not show growth in the long run but may be preferable in the long run. Try to go above the surface level and weigh every stock tactfully. With the long-term strategy, you may safeguard your portfolio and reposition it effectively.

Along with these factors be diligent while selecting your stocks and stay updated with changing market factors and trends. Along with your capabilities, gauge the sector’s capabilities as well. Aligning both may help you to build your portfolio aligning it with your investment goals.

Please note, the above content constitutes a very preliminary observation based on the industry and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.

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