Investing in industrial stocks can be a great way for long-term Canadian investors to multiply their hard-earned savings. Most industrial companies listed on the TSX play a key role in sectors like manufacturing and construction, which act as the Canadian economy’s backbone.
Well-established Canadian industrial companies offer steady growth, making them ideal for conservative long-term investors. In addition, including industrial stocks in your portfolio can help you reduce your risk profile by diversifying your stock portfolio, which can ultimately help you navigate periods of economic uncertainty. In this article, I’ll highlight two of the best industrial stocks you can buy on the TSX today.
SNC-Lavalin stock
SNC-Lavalin Group (TSX: ATRL) is a Montréal-headquartered industrial company with a market cap of $7.2 billion, as its stock trades at $41.24 per share after rallying nearly 73% in 2023 so far. This company primarily focuses on providing integrated professional and project management services to clients.
Despite the ongoing macroeconomic challenges, SNC-Lavalin’s financial growth remains strong, which could be the main reason why its share prices have outperformed the main TSX index by a huge margin year to date.
In the third quarter of 2023, the company’s services segment revenue touched a quarterly record high of $2 billion, reflecting a solid 24.4% YoY (year-over-year) jump with the help of strong demand for its engineering services. With this, SNC-Lavalin’s total revenue in the first three quarters of the year has gone up by 13.2% from a year ago to $6.3 billion. More importantly, its adjusted earnings during these nine months have surged by 33.7% YoY to $1.11 per share.
At the end of the September 2023 quarter, SNC-Lavalin Group’s engineering services backlog was at a record high of $5.1 billion. Similarly, its nuclear segment backlog rose 22.6% YoY in the third quarter to $1.7 billion. Given these strong backlog figures, you can expect the Canadian industrial giant’s strong financial growth trends to remain intact in the coming years, which should help its share prices rally.
Stantec stock
If you’re looking for fundamentally strong industrial stocks on the TSX today, Stantec (TSX: STN) could also be a great option to consider. This Edmonton-headquartered industrial firm currently has a market cap of $12 billion as its stock trades at $105.03 per share after advancing by 62% on a year-to-date basis. Stantec mainly focuses on providing a variety of engineering, architecture, and environmental consulting services to businesses globally.
One of the main factors that make Stantec a trustworthy industrial stock to consider on the TSX today is its geographically well-diversified business model. Besides its home market, the company also generates a large portion of its revenue from the United Kingdom, the United States, and the Middle East.
In the first three quarters of 2023, Stantec’s sales have gone up by 14.9% YoY to $3.8 billion with the help of strong demand and effective workforce management strategies. Also, high utilization helped it post a strong 24.3% YoY positive growth in its adjusted earnings during these three quarters combined to $2.86 per share.
Similar to SNC, Stantec’s backlog also currently remains near record-high levels, which is likely to help the company continue delivering strong financial growth in the years to come.
