4 Stocks to Buy as the Canadian Dollar Plummets

Companies like CAE Inc. (TSX:CAE)(NYSE:CAE) could get a boost from a plunging Canadian dollar in 2018.

| More on:
The Motley Fool

The Canadian dollar, at one point, fell to its lowest point since December 20, 2017, on February 28. And February saw the loonie’s biggest decline since May 2016 when the Alberta oil sands were ravaged by wildfires. Jerome Powell, the new chairman of the U.S. Federal Reserve, also painted a rosy picture of the U.S. economy and vowed to pursue more rate hikes going forward, which pushed up the greenback. Canada is set to release its fourth-quarter GDP on March 2 — a week after Statistics Canada posted disappointing retail sales for December.

Today, we will look at several stocks that could gain ground as the Canadian dollar falls.

AirBoss of America Corp. (TSX: BOS)

AirBoss is a Newmarket-based manufacturer of rubber-based products for resource, military, automotive, and industrial markets. Shares of AirBoss have declined 6.2% in 2018 as of close on February 28. Over 75% of AirBoss’s sales are in U.S. dollars, and it stands to gain from increased military spending in the U.S.

The company is expected to release its fourth-quarter results in March. In the third quarter, AirBoss posted net sales of $71.8 million compared to $66.6 million in the prior year. AirBoss also announced a quarterly dividend of $0.07 per share, representing a 2.7% dividend yield.

Canadian National Railway Company (TSX: CNR)(NYSE: CNI)

CNR is a Montreal-based rail and transportation business. CNR stock has dropped 4.2% in 2018 thus far. The company released its 2017 fourth-quarter and full-year results on January 23.

Revenues climbed 8% to $13.04 billion in 2017. Net income also jumped 51% to $5.48 billion in 2017. Improved performance was offset in part due to the impact of a stronger Canadian dollar over the course of the year. The company announced a 10% hike in its quarterly dividend to $0.46 per share, representing a 1.8% dividend yield.

Boyd Group Income Fund (TSX:BYD.UN)

Boyd Group is an auto-body collision-repair company based in Winnipeg. Boyd Group stock has climbed 4.8% in 2018 so far. In addition to its locations in four Canadian western provinces, Boyd Group also has operations in 14 U.S. states principally under the name Geber Collision & Glass. The company is set to release its 2017 fourth-quarter and full-year results on March 21.

In the third quarter, Boyd Group reported that sales increased 13.5% to $391.9 million. Adjusted EBITDA rose 5% year over year to $35.6 million. The stock offers a modest dividend of $0.04 per share, representing a 0.5% dividend yield.

CAE Inc. (TSX: CAE)(NYSE:CAE)

CAE is a Quebec-based company that designs, manufactures, and supplies simulation equipment with its subsidiaries. CAE gets just over a third of its revenues from the United States. Shares of CAE have increased 1.3% in 2018.

The company released its fiscal 2018 third-quarter results on February 9. It reported revenue of $704.4 million compared to $682.7 million in the prior year. Earnings per share jumped to $0.44 from $0.25 in the previous year, as the company saw a big boost from U.S. tax reform. The company also announced a dividend of $0.09 per share, representing a 1.5% dividend yield.

Fool contributor Ambrose O'Callaghan has no position in any of the 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.

More on Investing

ETFs can contain investments such as stocks
Tech Stocks

Your TFSA Owns 3 ETFs: It May Still Be 1 Big Technology Bet

Three ETFs can still overlap heavily, leaving you with one big U.S. mega-cap tech bet instead of true diversification.

Read more »

Person holds banknotes of Canadian dollars
Dividend Stocks

4 Canadian Stocks I’d Load Into My TFSA Without Hesitation

These Canadian stocks offer reliable income and have the potential to deliver solid capital gains, making them to bets to…

Read more »

earn passive income by investing in dividend paying stocks
Dividend Stocks

The Dividend Stocks That Pay You While You Sleep

Are you looking for stocks that you can depend on for predictable passive income. These three dividend stocks are safe…

Read more »

coins jump into piggy bank
Dividend Stocks

This TSX Stock Yields More Than the Average Savings Account Today

Income-focused investors can start researching Enbridge stock on this dip for a potential buy for higher income for long-term capital.

Read more »

frustrated shopper at grocery store
Dividend Stocks

Inflation Eating Your Savings? This Stock Fights Back

For Canadians with a long-term investment horizon, Brookfield Infrastructure is a solid stock to potentially buy on dips and hold…

Read more »

Oil industry worker works in oilfield
Energy Stocks

Oil Price Spike: Is it Too Late to Buy Enbridge Stock?

While higher oil prices create a positive backdrop for energy stocks, they aren't necessarily the main reason to buy Enbridge.

Read more »

shopper checks her receipt
Stock Market

Canada’s Retaliatory Tariffs Just Kicked In: Here’s What This Means for Your Portfolio

Learn about retaliatory tariffs and their potential consequences for businesses and trade relationships worldwide.

Read more »

A glass jar resting on its side with Canadian banknotes and change inside.
Retirement

How to Build Retirement Wealth Inside a TFSA or RRSP

These stocks have made some patient investors quite rich.

Read more »