The stock market has been facing challenges due to concerns over slower economic growth fueled by trade and tariff uncertainties. However, there’s a silver lining for investors. The Bank of Canada’s decision to ease monetary policy through consecutive interest rate cuts, along with moderating inflation, could provide a boost to the equity market.
That said, not all stocks will benefit equally. Investors should focus on TSX stocks with strong fundamentals and resilient business models to outperform the broader market this year. Moreover, one should look for companies that are witnessing steady demand for their products and services.
With this background, here are my top TSX stocks to buy for 2025.
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Dollarama
Dollarama (TSX: DOL) is one of my top TSX stocks to buy for 2025. The discount retailer’s resilient business model and ability to grow traffic in all market conditions make it a top investment for adding stability to your portfolio and generating above-average returns. Further, its growing earnings base enables the retailer to enhance its shareholders’ value through consistent dividend hikes.
Dollarama offers a wide variety of everyday consumable products at low, fixed prices. This strategy keeps shoppers coming back, no matter the economic climate. Besides its value proposition, Dollarama’s growing store footprint drives strong customer traffic, supporting its financial performance.
Dollarama’s consistent growth has translated into impressive stock gains. Over the past year, Dollarama stock has surged 44.6%, and in just three years, it’s delivered a staggering 117.5% return. Beyond capital appreciation, the company has also returned significant cash to its shareholders by raising its dividend 13 times since 2011.
Looking ahead to 2025, the company remains focused on expanding its footprint, optimizing sourcing efficiency, and implementing cost-saving strategies to further bolster its profitability. Higher earnings will drive Dollarama stock and enable it to return significant cash to its shareholders.
Waste Connections
Waste Connections (TSX: WCN) is another top stock to buy for 2025. It specializes in non-hazardous waste collection, transfer, and disposal services. What sets it apart is its focus on secondary and rural markets. This strategy helps it dominate the local market and reduce customer churn. Moreover, it leads to stable revenue and stronger financial returns compared to competitors operating in highly competitive urban areas.
In niche segments like energy exploration and production (E&P) waste treatment and disposal, Waste Connections benefits from an early-mover advantage in certain rural regions. With limited third-party waste disposal alternatives available, the company has carved out a lucrative space that enhances its market position and profitability.
Financially, Waste Connections continues to impress. The company closed out 2024 with double-digit growth in its top line and adjusted earnings before interest, taxes, depreciation, and amortization in the fourth quarter. Further, its employee turnover has dropped significantly, translating into operational efficiencies and stronger margins.
Looking ahead, 2025 could be another solid year for Waste Connections. The company’s ability to drive price-led organic growth in solid waste services and improve recycled commodity revenue and ongoing acquisitions puts it in an excellent position to generate solid free cash flow. Moreover, Waste Connections will enhance its shareholder value through higher dividend payments.
