The oil and gas industry and housing have provided a massive boon to the Canadian economy since the beginning of the 21st century. However, as we come to the last years of this decade, the economy will be forced to evolve and pull growth out of new sectors.
Oil and gas has seen investments fall since the 2014 oil crash. Canada housing will be subject to a set of new regulations specifically designed to cool housing prices, including stress tests on all new buyers, a foreign buyers’ tax implemented for some of the largest municipalities in the country, and the promise of rising interest rates.
With this in mind, let’s take a look at three companies with stocks listed on the TSX that could pick up the slack.
Brookfield Renewable Partners LP
Brookfield Renewable Partners LP (TSX:BEP.UN)(NYSE:BEP) is a Toronto-based company that owns and operates renewable power assets in the Americas and in Europe. The stock has climbed 9.3% in 2017 as of close on October 30th and 7% year over year. It also offers a dividend of $0.58 per share, representing a 5.3% dividend yield. In an August article, I discussed why Brookfield Renewable Partners was a great target for investors looking to benefit from the green energy revolution.
A report by the National Energy Board in the spring of 2017 revealed that 66% of Canada’s electricity now comes from renewable energy, generating 79,000 megawatts in 2015. Though Canada has made strides, it still has a lot of work to do to meet its climate goals by 2030. One such target is to reduce greenhouse gas emissions by 30% by this deadline.
Brookfield Renewable Partners has seen above-average generation in Canada and the U.S.
Tucows Inc. (TSX:TC)(NASDAQ:TCX) is a Toronto-based internet services and telecommunications company and the second-largest domain registrar in the world. The stock price has increased 55.6% in 2017 and 83% year over year. The domain registrar industry has seen steady growth this decade, though it slowed somewhat in 2016.
The company released its second-quarter results on August 8. It posted net revenues of $84.2 million compared to $47.2 million in Q3 2016. Net earnings grew to $5.2 million, or $0.50 per share, compared to $4 million, or $0.29 per share, the year previous. Adjusted EBITDA also jumped 50% to $10.3 million. Tucows more than doubled revenues in its domain services segment and also saw an improvement in total network access services.
ATS Automation Tooling Systems Inc.
ATS Automation Tooling Systems Inc. (TSX:ATA) is a designer and builder of engineered turn-key automated manufacturing and test systems. It also provides pre- and post-automation services to customers. Shares of ATS Automation have increased 15.3% in 2017 and 21% year over year. In a September article, I covered the company and the rise of automation.
A study from a think tank at the University of Toronto in 2016 revealed that Canada could lose up to 7.5 million jobs due to the rise of automation over the next 10-15 years. Even high earners will not be spared from the transformation companies are making. Everything from autonomous vehicles to the rise of robo-advisors will threaten a variety of skilled workers.
This news will obviously put a strain on policy makers, as Canada and other nations adjust to this new reality. In the meantime, the increased demand for factory automation should see ATS Automation stock continue to rise in the coming years.