Canadian Comeback Kings: 3 TSX Stocks Set to Soar When the Economy Roars

Here are three top TSX stocks which should be considered comeback kings, if the Canadian economy takes off once again.

| More on:
investment research

Image source: Getty Images

As the Canadian economy looks poised for a strong rebound in 2025, investors have a unique opportunity to position their portfolios for growth. From banking to transportation and energy, key sectors show signs of resilience and recovery.

For those who are looking to capitalize on this economic resurgence, the following three stocks stand out. Here is why these companies are excellent bets for a thriving Canadian economy.

Royal Bank of Canada

Royal Bank of Canada (TSX:RY) is one of the largest and most trusted Canadian financial institutions and a barometer of the nation’s economic health. With its diverse revenue streams and strong market position, Royal Bank is well-equipped to benefit from a recovering economy.

As the Canadian economy rebounds, consumer and business activity is expected to increase, driving demand for loans, mortgages, and other financial services. Royal Bank’s robust retail banking segment is poised to thrive, while its wealth management and capital markets divisions can see increased activity as investor confidence grows.

In addition, the company’s history of consistent dividend payments makes it a favourite among income investors. Its ability to maintain and grow dividends, even during challenging economic periods, underscores its financial strength. As the economy improves, the bank’s profitability and dividend payouts are expected to rise, providing a reliable income stream for shareholders.

Canadian National Railway

Canadian National Railway (TSX:CNR) is a cornerstone of the country’s transportation infrastructure, critical in connecting industries and facilitating trade. As economic activity picks up, the demand for freight transportation is set to rise, making CNR a prime beneficiary.

The vast network of railway spans Canada and parts of the United States, enabling it to move goods efficiently across key markets. As manufacturing, agriculture, and energy sectors ramp up production, CNR’s freight volumes can increase. In addition, the company’s exposure to international trade positions it to benefit from global economic recovery.

The commitment of CNR to operational excellence and cost management has helped it maintain strong margins. Its precision scheduled railroading (PSR) model ensures that resources are used efficiently, translating to better profitability and shareholder returns. Moreover, the company’s investments in fuel-efficient locomotives and other green technologies align with the growing emphasis on environmental responsibility. This focus reduces costs and strengthens its reputation among socially conscious investors.

Suncor Energy

Suncor Energy (TSX:SU) is one of Canada’s largest integrated energy companies and stands to benefit significantly from a recovering economy. With operations spanning oil sands development, refining, and retail, Suncor is well-positioned to capitalize on rising energy demand.

Global energy markets are expected to stabilize and strengthen in the coming years, with oil prices likely to rebound as demand increases. Suncor’s low-cost production model allows it to generate strong cash flows even at moderate price levels, making it a resilient player in the energy sector.

Suncor has consistently prioritized returning value to shareholders through dividends and share buybacks. As its financial performance improves with the economy, investors can expect enhanced returns. The company’s focus on reducing debt and improving operational efficiency further strengthens its investment appeal. In addition, Suncor’s efforts to transition towards cleaner energy solutions and reduce its carbon footprint demonstrate its commitment to long-term sustainability. By balancing its traditional oil operations with investments in renewable energy, Suncor is aligning itself with the global energy transition while continuing to deliver value.

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 National Railway. The Motley Fool has a disclosure policy.

More on Investing

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

How to Use Your TFSA to Average $382.50 Per Month in Tax-Free Passive Income

This TFSA strategy can reduce risk while raising the average yield.

Read more »

Trans Alaska Pipeline with Autumn Colors
Energy Stocks

Better Pipeline Stock: Enbridge vs. TC Energy?

Enbridge and TC Energy are two pipeline stocks that offer shareholders tasty dividend yields in January 2025.

Read more »

Man holds Canadian dollars in differing amounts
Dividend Stocks

Invest $22,000 in This Dividend Stock for $108.50 in Monthly Passive Income

This dividend stock is a top option for investors looking for not just long-term passive income but regular income every…

Read more »

stock research, analyze data
Dividend Stocks

Generate $500 in Tax-Free Monthly Income With This Easy Strategy

Passive-income investing is easy thanks to this fund's steady $0.10-per-share monthly payout.

Read more »

Start line on the highway
Stocks for Beginners

3 Beginner-Friendly Stocks Perfect for Canadians Starting Out Now

New investors seeking beginner-friendly stocks should consider this trio of options that can provide decades of growth and income.

Read more »

how to save money
Dividend Stocks

Got $2,000? 5 Telecom Stocks to Buy and Hold Forever

The discount and recovery potential are reasons enough to consider telecom stocks in Canada right now. The fact you can…

Read more »

cryptocurrency, crypto, blockcahin
Tech Stocks

Earn an 11% Yield With This Bitcoin-Focused ETF

This ETF converts the high volatility of Bitcoin into above-average monthly income.

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Investing

3 Canadian Stocks to Consider Adding to Your TFSA in 2025

These three Canadian stocks are excellent additions to your TFSA in this uncertain outlook.

Read more »