Businesses across all sectors play a vital role in the Canadian economy. Manufacturing and industrial businesses operate in various sectors, providing core services, goods, and products essential to economic growth. Investing in shares of publicly traded companies operating in various manufacturing and industrial spaces means betting on companies driving the Canadian economy’s growth.
To this end, there are two TSX stocks I will discuss today. Despite the challenging market environment, these two domestic businesses have been thriving in 2023. Delivering market-beating returns, these two stocks are also favored among stock market investors.
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SNC-Lavalin Group
SNC-Lavalin Group (TSX:SNC) is a $5.84 billion market capitalization giant in the Canadian construction industry. The Montreal-based company offers engineering, procurement, and construction services to various industries.
It is effectively a major operator in the sector, empowering other industrial giants driving the Canadian economy’s growth. Its clients also include businesses from the infrastructure and clean energy industries, making it a pivotal company for the economy.
The company aims to become the preferred Professional Services and Project Management company in Canada. Despite the challenging market environment, SNC had great results in its first quarter of fiscal 2023. The company’s net income from continuing operations grew by 14.5% year over year.
As of March 31, its backlog soared to a record $12.1 billion, reflecting an 8% year-over-year increase. The company’s management takes particular pride in having such a backlog, because it shows SNC stock’s resilience in the volatile market.
As of this writing, SNC stock trades for $33.31 per share, offering its investors their shareholder dividends at a meagre 0.24% dividend yield.
Wajax
Wajax (TSX:WJX) is another major player in the industrial space catering to other industries and core sectors. Wajax is a $500.81 million market capitalization company headquartered in Mississauga. It is a Canadian industrial components distributor. Its core business is selling parts and offering service support for equipment, power systems, and industrial components throughout Canada.
The company generates most of its revenue through equipment sales, including machinery and components used for construction. It also services companies in forestry, mining, and material handling sectors.
Operating around 100 branches, it is vital to the economy, as it provides end-to-end services to major industries. In the first quarter of fiscal 2023, its top line grew by 17.4% year over year. Its bottom line grew by 8.8% in the same period.
As of this writing, Wajax stock trades for $23.17 per share and boasts a juicy 5.70% dividend yield.
Foolish takeaway
As of this writing, the S&P/TSX Composite Index is up by 2.31% year to date. While the Canadian benchmark index is up year to date, it has remained volatile during the first half of the year. Not every company trading on the TSX has performed as well as the broader economy. That said, there are several stocks that have delivered a market-beating performance.
Up by 34.42% and almost 20%, SNC stock and Wajax stock, respectively, are beating the broader market’s performance by substantial margins. If you want to bet on companies driving economic growth in Canada, these two TSX stocks can be wise picks for your self-directed portfolio.
