The S&P/TSX Composite Index has dropped 2.5% month over month as of close on June 2. The oft-repeated investment adage, “sell in May and go away,” paid off early for those who swear by it. However, there is still a long summer ahead for the Canadian market to pick up steam.
Today, I want to look at three of the top-performing TSX stocks that bucked the trend in an otherwise tough month of May. Let’s jump in.
Image source: Getty Images
This top TSX stock went beast mode in the month of May
TMX Group (TSX:X) is a Toronto-based company that operates exchanges, markets, and clearinghouses primarily for capital markets in Canada and around the world. Shares of this TSX stock climbed 5.1% month over month as of close on June 2. The stock is now up 10% so far in 2023. Investors who want to see more of its recent performance can play with the interactive price chart below.
This company released its first quarter (Q1) fiscal 2023 earnings on May 1. TMX Group achieved record revenue of $299 million in Q1 fiscal 2023 — up 4% compared to Q1 fiscal 2022. Meanwhile, adjusted diluted earnings per share increased 2% year over year to $1.85. The company benefited from its impressive portfolio of assets, as it posted double-digit percentage growth in Global Solutions, Insights and Analytics Business, and Derivatives Trading and Clearing.
Shares of this TSX stock currently possess a solid price-to-earnings (P/E) ratio of 22. Moreover, TMX Group offers a quarterly dividend of $0.87 per share. That represents a 2.3% yield. The stock has achieved seven straight years of dividend growth. This makes TMX Group a Canadian Dividend Aristocrat.
Here’s a hot restaurant stock you might want to target this summer
Restaurant Brands International (TSX:QSR) is also based in Toronto. It operates as a quick-service restaurant company in Canada, the United States, and worldwide. The three top fast-food chains it owns and operates are Burger King, Tim Hortons, and Popeyes Louisiana Chicken. It added Firehouse Subs to its stable of restaurants in December 2021. Restaurant Brands stock has jumped 7% over the past month as of close on June 2, reaching a 52-week high. Shares of this TSX stock have now climbed 16% in the year-to-date period.
Investors got to see RBI’s first batch of fiscal 2023 earnings on May 2. The company delivered consolidated system-wide sales growth of 15% compared to the previous year. Indeed, RBI has been a strong performer in the restaurant sector, even in the face of the COVID-19 pandemic. It achieved system-wide sales growth of 17%, 14%, and 14%, respectively, at Burger King, Tim Hortons, and Popeyes in Q1 2023. RBI’s chains are firing on all cylinders, powered adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) growth of 15% to $588 million.
This TSX stock has been red-hot in the late spring. Investors might not be eager to buy at its current top, but this is a stock that is geared up for long-term growth. RBI also offers a quarterly dividend of $0.55 per share, which represents a 2.9% yield.
One more hot TSX stock to watch in June
PrairieSky (TSX:PSK) is the third TSX stock that delivered big gains in the month of May. This Calgary-based company holds crude oil and natural gas royalty interests in several Canadian provinces, including Alberta, British Columbia, and Manitoba. Its shares have increased 8.5% month over month as of close on June 2, reaching a 52-week high over the past week. The stock is up 16% so far in 2023.
In Q1 2023, this company delivered strong royalty production volumes of 24,809 barrels of oil equivalent per day (boe/d) and total revenues of $126 million. However, management stated that earnings were negatively impacted by “lower sliding scale oil volumes and downtime at one of the thermal oil projects where PrairieSky owns a royalty.”
Shares of this TSX stock last had a favourable P/E ratio of 18. It offers a quarterly dividend of $0.24 per share, representing a 3.9% yield.
