In today’s unpredictable market, where tariffs and trade tensions can send shockwaves through portfolios, investors often seek refuge in sectors that offer stability and resilience. Infrastructure and waste management are two such sectors, providing essential services that remain in demand regardless of economic fluctuations. Among Canadian stocks, Brookfield Asset Management (TSX:BAM) and Waste Connections (TSX:WCN) stand out as top picks that could potentially double in value as they navigate and capitalize on market uncertainties.
BAM stock
Brookfield Asset Management is a global leader in alternative asset management, with over $1 trillion in assets under management as of the third quarter of 2024. The Canadian stock’s diversified portfolio spans renewable power, infrastructure, private equity, real estate, and credit. This extensive diversification positions BAM to mitigate risks associated with any single sector or market.
In the third quarter of 2024, BAM reported distributable earnings before realizations of $1.3 billion. A 19% increase over the prior-year quarter. This growth was driven by a 14% increase in fee-related earnings, attributed to successful fundraising across various strategies, particularly in credit funds and insurance inflows.
Looking ahead, BAM aims to more than double its distributable earnings to $5 billion by 2028. The Canadian stock plans to achieve this ambitious target by increasing its fee-bearing capital, which is expected to reach $1 trillion over the next five years. Given its track record and strategic initiatives, BAM is well-positioned to deliver substantial returns to its shareholders.
Waste Connections
Waste Connections is a premier solid waste services company providing waste collection, transfer, disposal, and recycling services across North America. The Canadian stock’s decentralized operating model allows it to efficiently manage operations and maintain strong local relationships. Contributing to its robust financial performance.
In the third quarter of 2024, Waste Connections reported revenue of $2.338 billion, marking a 13.3% increase year over year. Net income for the quarter was $308.0 million, up from $229.0 million in the same period the previous year. The Canadian stock also raised its full-year 2024 outlook, now estimating revenue of approximately $8.9 billion, up $150 million from its original projection.
Looking forward to 2025, Waste Connections anticipates mid to high single-digit revenue growth. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) are expected to grow in the high single digits. The Canadian stock also projects above-average margin expansion. Driven by ongoing consolidation in the fragmented waste management industry and operational efficiencies.
Why the stocks could double
Both BAM and WCN operate in sectors that provide essential services, making each less susceptible to economic downturns or market volatility. The strong financial performances, strategic growth initiatives, and resilience amid market uncertainties position Canadian stocks as attractive investment opportunities.
Brookfield’s diversified asset base and ambitious growth targets, coupled with its successful fundraising and monetization activities, suggest a trajectory of sustained earnings growth. As the Canadian stock continues to expand its fee-bearing capital and capitalize on macroeconomic trends, its stock value could see significant appreciation.
Similarly, Waste Connections’s consistent revenue growth, strategic acquisitions, and focus on operational efficiency position it well for continued success. The Canadian stock’s ability to integrate acquisitions and realize synergies has been a key driver of its growth. And with a robust pipeline of opportunities, WCN is poised for further expansion.
Bottom line
In a market rattled by tariffs and trade tensions, infrastructure and waste management stocks like Brookfield Asset Management and Waste Connections offer a blend of stability and growth potential. The essential services, strong financials, and strategic initiatives make these stocks compelling choices for investors seeking to navigate uncertainty and capitalize on long-term growth opportunities.
