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.

Ambrose O'Callaghan

Ambrose O'Callaghan graduated with a BA in Political Science from McMaster University. After that, he jumped into the banking world. He worked from the front line to an investment associate role. After that, he found a way to marry his experience and knowledge in the world of banking and finance to his love and passion for writing. Ambrose is a passionate believer in Warren Buffett's value investing model.

Published March 1, 2018 7:26 am EST

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.