For investors looking at Canadian stocks in this environment, it’s been a rather interesting year across the board for some of the country’s biggest names. While most investor attention continues to go to the largest names (and for good reason), there are plenty of perhaps less conspicuous stocks that have outperformed or underperformed over the past year.
Using a one-year time horizon, I’m going to discuss two of the top stocks that stand out to me as big surprises over the past year. These companies are ones I still think have plenty of long-term upside potential. However, these companies are also among those that many investors appear to feel could have rockier near-term stock price performance.
Let’s dive in!
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Manulife Financial
On the positive side of the ledger, I think it’s important to reiterate what a strong year insurance giant Manulife Financial (TSX: MFC) has had.
Looking at the stock chart above, it’s clear that this company’s outperformance over the past year means investors are once again bullish on this rather boring business. That’s not to say it’s all sunshine and rainbows for Manulife in the past. In fact, this company is one that has been so-called “dead money” during previous periods in the past for various reasons (including the company’s portfolio of long-duration fixed-income securities).
However, with interest rates on their way down and the company’s valuation still sitting at a very attractive level, there’s reason to like this stock here. At a price-to-earnings ratio of just 15 times trailing earnings and with a considerable dividend yield, this is a bond-like proxy investors can look to for stability in these uncertain times.
For Canadian investors, I think that trend will likely continue until we get some additional clarity on tariffs and other measures the Trump administration may be looking to put in place.
Restaurant Brands
A relative underperformed over the past year, down more than 11% over the past 12 months, Restaurant Brands (TSX: QSR) is one stock I thought would have done better last year and into this year. That said, we’re at where we’re at.
Looking at the stock chart above, it’s clear that Restaurant Brands has plenty of upside potential if the company can return to its previous slow and steady churn higher. That said, it’s becoming clear that the value offerings the company has put forward aren’t necessarily striking the tone they’d hoped consumers would tap into. With the rise of GLP-1 drugs and an invigorated focus on healthier eating, there are concerns that are bubbling to the surface for investors.
That said, I’m of the view that this is a company that could provide investors with excellent long-term returns, given the company’s dividend yield, which is now around 3.7%. For those seeking stability, I think both companies are great options in this current environment.
