2 Top Industrial Stocks to Buy on the TSX Today

Here are two of the top industrials stocks on the TSX long-term investors can consider buying at current levels for long-term returns.

| More on:
Businessman and engineer handshake closing a deal in construction site

Image source: Getty Images

Industrial stocks usually consist of some of the most important sectors in an economy. Thus, they are excellent assets to diversify one’s portfolio and effectively spread one’s risks. 

However, just purchasing stocks across different sectors will not do. Investors need to look for companies which have strong growth prospects and solid financials. By doing so, they can ensure that the businesses can generate sustainable profits down the line, ensuring long-term capital appreciation.    

In this regard, here are the top two industrial stocks on the TSX. 

Canadian Pacific Railway

Canadian Pacific Railway (TSX:CP) operates trans-continental railway freight systems in Canada and the United States of America. CP has navigated the high commodity price environment well, beating analyst estimates in recent quarters.  

This past quarter, CP reported quarterly earnings of US$0.68 per share, surpassing analyst estimates of US$0.68 per share. Moreover, the company’s reported operating ratio (OR) appreciated to 64.9%, and its core adjusted combined OR grew to 61.7%, indicating an increase of 540 basic points and 190 basic points, respectively.  

Canadian Pacific also declared a dividend payment of $0.19 per common share for the current quarter. It will be payable on Jan. 29 and will be available to shareholders of record on Dec. 28.  

Magna International

Magna International (TSX:MG) is a Canadian multinational designer and manufacturer of manufacturer (OEM) modules, subsystems, assemblies, and components. 

As per the latest reports, this company is developing a modular eDecoupling unit for a German premium OEM. It is the first of its kind in the market and will be able to support multiple battery electric vehicles (BEVs). This technology will also help reduce battery usage and increase the overall driving range by 9%. 

Additionally, Magna has signed a long-term supply agreement with Onsemi to integrate its EliteSiC intelligent power solutions. It will improve the efficiency of Magna’s eDrive systems, along with providing increased driving range, better cooling, quicker acceleration, etc. 

Furthermore, the end-to-end silicon carbide manufacturing facilities of Onsemi will help Magna increase production, simplify its supply chain, and improve its vertical integration. Apart from this, the Canadian auto parts manufacturer had excellent financial results in the third quarter of 2023. 

It had a 15% sales growth, amounting to US$10.7 billion and diluted earnings per share of US$1.37. The company’s adjusted earnings before interest, taxes, depreciation, and amortization also appreciated to US$615 million from last year’s same quarter’s US$452 million. As per sources, higher global light vehicle production and increasing selling prices enabled Magna to effectively cover its production costs, thus resulting in its profits. 

Bottom line 

Both companies have strong financials and solid growth prospects. Thus, investors looking to add industrial stocks to their portfolios can consider buying these two stocks at current levels, in my view.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool recommends Canadian Pacific Kansas City and Magna International. The Motley Fool has a disclosure policy.

More on Investing

The sun sets behind a high voltage telecom tower.
Dividend Stocks

Should You Buy Northland Power for its 5% Dividend Yield?

Northland Power stock trades 52% below all-time highs and offers shareholders a tasty dividend yield of 5% right now.

Read more »

TFSA and coins
Dividend Stocks

2 Top Stocks to Add to Your TFSA in February 2024

These two TSX stocks can be excellent holdings for your self-directed TFSA portfolio to inject stability and tax-free wealth growth.

Read more »

edit Back view of hugging couple standing with real estate agent in front of house for sale
Stocks for Beginners

Investors: What to Expect From Canada’s Real Estate Market in 2024

What does 2024 hold for Canada’s real estate market? Let's find out from Nathan Levinson of Royal York Property Management.

Read more »

dividends grow over time
Dividend Stocks

Passive-Income Seekers: Invest $10,000 for $400 or More in Annual Income

Are you interested in generating passive income? Invest $10,000 for a hefty annual income!

Read more »

edit Sale sign, value, discount
Tech Stocks

Got $1,000? 2 Stocks to Buy Now While They’re on Sale

These two top Canadian growth stocks look underpriced right now to buy for the long term.

Read more »

Two seniors float in a pool.
Tech Stocks

Could Nuvei Stock Help You Become a Millionaire?

Nuvei stock is favourably priced today for growth focused investors to buy. Could the stock enhance your chances to build…

Read more »

Canadian Dollars
Dividend Stocks

Want Decades of Passive Income? 3 Stocks to Buy Now

Want passive income that could last a lifetime? These three top Canadian dividend stocks have a good chance of delivering…

Read more »

Two seniors float in a pool.
Dividend Stocks

Retiring on Dividends: How Much Do You Need to Quit Work?

Canadians might need more than $1 million to quit work, but can still live comfortably in retirement with sustained dividend…

Read more »