Although earnings season is now in the rearview for the majority of TSX stocks, there are still a handful of high-quality companies that have yet to report earnings.
Earnings season is always an important time for investors since it gives us an updated look into how businesses are performing. Plus, since there is still so much uncertainty in both the economy and the stock market, this earnings season is even more important to get an idea of how these high-quality TSX stocks are faring in this environment.
So, if you’ve got cash on the sidelines you’re looking to put to work, here are three high-quality TSX stocks that analysts expect to report strong earnings this quarter.
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One of the best TSX stocks that continues to report strong earnings
There’s no question that one of the best stocks on the market is Dollarama (TSX:DOL). So, many investors will certainly be watching when it reports earnings before the market opens tomorrow, Wednesday, December 4.
Analysts estimate that Dollarama will report a 6.2% increase in revenue year over year to just shy of $1.57 billion for the quarter ended October 31st.
Furthermore, analysts also estimate that Dollarama’s normalized earnings per share (EPS) will increase by 6.8% year over year to $0.98.
That’s not just another quarter of impressive growth; it also shows how consistent Dollarama is. In fact, Dollarama has grown its sales in every single quarter for more than a decade now. Furthermore, its sales have grown by more than 5% year over year for every quarter dating back to the middle of 2021.
Therefore, Dollarama is certainly a stock to watch when it reports earnings tomorrow.
A top bank stock expected to report impressive earnings
The major bank stocks in Canada are also set to report earnings this week, and some of the strongest earnings that analysts are expecting are from Canadian Imperial Bank of Commerce (TSX:CM), which reports on December 5.
For the quarter that ended on October 31, analysts estimate that CIBC’s revenue will increase to just over $6.5 billion, a jump of 11.6% year over year.
Furthermore, and more importantly, analysts predict that its normalized EPS will jump to $1.78, an increase of 13.6% year over year.
Plus, in addition to the strong earnings that investors are expecting from the TSX bank stock, CIBC could also increase its dividend this quarter, driving up an already compelling dividend yield of 4% even higher.
Therefore, while it’s always important to keep an eye on how the big banks are performing in Canada, CIBC is especially intriguing this quarter.
One of the best retail stocks in Canada
While both Dollarama and CIBC are set to report earnings this week, Aritzia (TSX:ATZ) will report its earnings on January 10 for the quarter that just ended on November 30.
As one of the most impressive growth stocks in Canada, many investors will be watching Aritzia closely, especially since analysts expect its stellar growth to continue.
Currently, analysts estimate that its revenue will increase to just shy of $700 million for the quarter, a 6.7% jump year over year. Furthermore, Aritzia’s normalized EPS is expected to increase to $0.63, a 34% jump year over year, as Aritzia continues to rebound and see its improved operations help strengthen its margins.
For comparison, in the same quarter last year, Aritzia managed net income margins of just 8.1%, and this quarter, analysts expect margins of 10.5%, which is a massive jump year over year.
So, with Aritzia clearly turning its business around and with years of growth potential ahead of it, it’s certainly one of the best stocks to keep your eye on, especially while it continues to trade undervalued.
In fact, not only is Aritzia still trading off its all-time high despite posting consistent growth in its revenue and operations, but it’s also trading cheaply according to its valuation metrics. For example, it currently trades at a forward price-to-earnings ratio of 24.2 times, which is still below its five-year average of 27.8 times.
Therefore, if you’re looking for a high-quality stock that’s both cheap and has significant growth potential, Aritzia is certainly a top choice for Canadian investors.
