Amid easing trade tensions, Canadian equity markets have witnessed solid buying over the last few days, driving the S&P/TSX Composite Index 11.6% higher from its April lows. However, concerns over the economic slowdown due to tariffs still persist. Therefore, investors should balance their portfolios with a mix of quality growth, defensive, and dividend stocks. Meanwhile, here are my three top picks.
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Celestica
Celestica (TSX: CLS) is an excellent growth stock to have in your portfolio due to its solid financials and high-growth prospects. The company posted an impressive first-quarter performance last week, exceeding its guidance. Its topline grew 20% to $2.65 billion amid growth across its two segments. The revenue from the Connectivity & Cloud Solutions (CCS) segment increased by 28%, with Hardware Platform Solutions generating $1 billion in revenue. Meanwhile, the revenue from the Advanced Technology Solutions (ATS) segment grew 5% during the quarter. Amid top-line growth, its adjusted operating margin expanded from 5.9% to 7.1%. Additionally, the company repurchased 0.6 million shares for $75 million, which supported its EPS (earnings per share) expansion. Amid all these factors, the company’s adjusted EPS grew 44.6% to $1.20.
Moreover, the growing adoption of AI (artificial intelligence) has led to increased investments in expanding its AI-related infrastructure, thereby driving demand for Celestica’s products and services. The company has also raised its 2025 guidance following the release of its first-quarter performance. The company’s management projects its 2025 revenue to grow 12.4% year over year to $10.85 billion. Its adjusted operating margin could expand from 6.5% to 7%, while its adjusted EPS could increase by 28.9%. Despite its healthy growth prospects, the company trades at an attractive NTM (next 12 months) price-to-earnings multiple of 16.6, making it an ideal buy.
Enbridge
Given its consistent dividend growth and high yield, Enbridge (TSX: ENB) is an excellent dividend stock to buy right now. The Calgary-based company operates a regulated midstream energy business with a tolling framework and long-term take-or-pay contracts, stabilizing its financials. Additionally, its low-risk natural gas utility assets and PPA-backed renewable energy assets boost its financials. Amid these solid financials, the company has paid dividends for 70 years. It has also increased its dividends at an annualized rate of 9% over the past 30 years, while its forward dividend yield currently stands at 5.85%.
Further, Enbridge has strengthened its cash flows by acquiring three natural gas utility assets for $19 billion. Additionally, the company continues to invest in expanding its asset base, aiming to put $23 billion of assets into service over the next three years. Amid these growth initiatives, the company’s management expects its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) to grow at a 7-9% CAGR (compound annual growth rate) through 2026 and 5% thereafter. The company’s management also expects the continuation of its acquisitions to lower its debt-to-EBITDA in the coming quarters, thereby strengthening its financial position.
Waste Connections
Waste Connections (TSX: WCN) is an excellent defensive bet due to the essential nature of its business. The company collects, transfers, and disposes of non-hazardous solid waste in secondary and exclusive markets across Canada and the United States. Its solid financial growth amid organic and inorganic expansions has supported its stock price growth, with the company delivering over 420% returns in the last 10 years at an annualized rate of 18%.
Meanwhile, WCN continues to expand its footprint through organic growth and acquisitions. It is developing 12 renewable natural gas and resource recovery facilities, which could contribute $200 million to its annualized EBITDA. As of April 23, the company had acquired several assets this year, which could contribute $125 million to its annualized revenue. Furthermore, the adoption of technological advancements and improvements in employee retention could support margin expansion in the coming quarters. The company has also increased its dividends since 2010 at a 14% CAGR, while its forward dividend yield is 0.65%.
