MENU

Looking for Better Returns? These 3 Stocks Have Outperformed the TSX

Up until recently, the TSX yielded no returns for investors, but as the price of oil has increased, so too has the index. However, with an increase of just 2% year to date, the returns we have seen for the TSX are still nothing to brag about, and it would be understandable for investors to want to look for well-performing stocks that can achieve higher gains than the market. The three stocks I have listed below have all seen great returns this year and could still be great buys today.

Canadian National Railway Company (TSX:CNR)(NYSE:CNI) has seen its share price rise 14% in 2017, and after recovering from a recent dip, there may still be lots of upside left for the stock. Shortly after the company’s Q2 earnings in July, the stock dropped to under $100 and has since recovered as it approaches earnings later this month. As the economy continues to grow, railroads will transport more goods, and we should expect better results from Canadian National Railway as a result.

The stock might be a bit expensive for value investors with a price-to-earnings multiple of 20 and the shares trading at more than five times book value. However, Canadian National Railway saw strong growth in its last quarter with revenues up 17% year over year and profits also having improved by 20%. Another good quarter could give the stock a big boost and potentially send it to new highs.

Canadian Tire Corporation Limited (TSX:CTC.A) has had an up and down year so far in 2017 with its share price reaching highs of $170 and lows of $138. Currently, the stock sits around $155, and it has generated 12% returns year to date as the company got a boost from a strong Q2, where it saw its net income increase 9% from the previous year. However, Canadian Tire’s flagship brand has struggled to see sales increase, and its Mark’s stores are fueling a lot of the company’s growth. Over the long term, I would have concerns about how Canadian Tire will be able to grow its sales, especially in a struggling retail industry.

Currently, the stock trades at 15 times earnings and a multiple of over three times its book value, which provides decent value for one of Canada’s most recognizable brands. Although the stock has shown some volatility this year, with a strong quarter, it could get back up to highs of around $170, which would net you a decent 10% gain off where the price is today.

Gildan Activewear Inc. (TSX:GIL)(NYSE:GIL) is another high-performing stock with its share price rising over 14% this year, and more could still come as the company acquired the popular American Apparel brand earlier this year. The big question mark is how U.S. consumers will react to the American Apparel brand being manufactured outside the U.S. and if that will hurt the brand’s sales.

What I like about the company is that in the past four years, it has averaged strong profit margins of 13%, while seeing sales rise in two of the past three years, and the growth should only continue with contributions from its new acquisition.

The Next Canadian Superbrand You’ve Never Heard of...

This small-cap stock is “Hidden in Plain Sight!” It’s flying under the radar and is being touted as a “royalty collector” by several of our top Canadian analysts.

Right now you aren’t on the list to receive our formal “buy recommendation”, so don’t delay – simply click here to enter your email address and discover how you can access the exclusive report.

Fool contributor David Jagielski has no position in any stocks mentioned. David Gardner owns shares of Canadian National Railway. The Motley Fool owns shares of Canadian National Railway. Canadian National Railway is a recommendation of Stock Advisor Canada.

I consent to receiving information from The Motley Fool via email, direct mail, and occasional special offer phone calls. I understand I can unsubscribe from these updates at any time. Please read the Privacy Statement and Terms of Service for more information.