A lot of folks may be considering putting $5,000 into the Canadian stock market in 2025. It can seem like a big decision, but with a bit of research, it can be quite interesting. Picking the right investments is key to seeing your money potentially grow. Let’s have a closer look at Celestica (TSX:CLS), a Canadian company that trades on the TSX and certainly looks promising.
About Celestica
Celestica is a well-established Canadian company with operations that span the globe. Essentially, it acts as a partner for other businesses, helping them with the nitty-gritty of getting their products made and delivered. This includes everything from the initial design stages right through to managing the complex supply chains that are so crucial in today’s world. Having a broad base of customers can be a real strength for Celestica. It not only provides a level of stability, as the Canadian stock isn’t overly reliant on a single industry. But it also opens up numerous avenues for potential growth as these different sectors evolve and expand.
To get a sense of how Celestica has been performing, it’s helpful to look at its recent financial results. In the fourth quarter of 2024, the Canadian stock reported bringing in revenue of $2.6 billion. This figure represents a significant jump of 19% when compared to the revenue generated during the same period last year. This kind of growth can be quite encouraging for investors.
More importantly, Celestica’s profitability also saw a healthy increase. The profit after taking care of all the expenses amounted to $151.7 million. When this profit is divided by the number of outstanding shares, it translates to earnings per share (EPS) of $1.60. This is a notable improvement compared to the $0.66 per share that the Canadian company earned in the same quarter last year. A substantial part of this positive performance was attributed to the strong results within their Advanced Technology Solutions segment. This focuses on more complex and high-value manufacturing services.
Future outlook
Looking ahead, the management team at Celestica seems to have a positive outlook on the company’s prospects for 2025. They have publicly stated their expectation that the company’s revenue will continue on its growth trajectory. A key part of their strategy involves focusing on markets that are anticipated to experience significant expansion in the coming years. Areas like renewable energy, which is gaining increasing importance globally, and health technology, a sector driven by constant innovation and an aging population, are particular areas of focus.
When considering a Canadian stock as a potential investment, it’s often useful to look at how the market currently values the company. One common metric used for this purpose is the price-to-earnings (P/E) ratio. This ratio compares a company’s current stock price to its earnings per share. It can provide an indication of whether a stock might be considered overvalued, undervalued, or fairly priced relative to its earnings.
Right now, Celestica’s P/E ratio sits around 22. This is just one data point. Yet it can be helpful to compare it to the average P/E ratio of other Canadian stocks in the same industry to get a broader perspective on its valuation. Furthermore, it’s worth noting that Celestica has been actively engaged in buying back some of its own shares in the market, showing confidence in its future.
Bottom line
Investing in Celestica could potentially offer you exposure to a Canadian stock that has a demonstrated solid track record of performance. It also has benefits from diverse revenue streams across different industries and a clear strategic focus on tapping into high-growth sectors of the economy. However, it is crucial to remember that the stock market involves risks. And past performance is not necessarily indicative of future results. As always, before making any investment decisions, it is essential to conduct your own thorough research and carefully consider your individual financial goals, your tolerance for risk, and your overall investment strategy.
