There’s been plenty of ado made around how tariffs are likely to impact the Canadian economy. Such analysis is fair, given the amount of trade that takes place between Canada and the U.S. Indeed, with a resource-driven economy, any sort of major shift in how global trade is conducted will have some amount of impact on an economy like Canada’s.
That said, there happens to be a number of top Canadian growth stocks I think are well-positioned to weather this storm, and have done so thus far. These companies continue to have strong underlying secular growth catalysts that I think can compel their share prices higher over the long term.
Let’s dive into those two tariff-resistant companies, and why I think they’re worth considering right now.
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BYD Group
Not to be confused with the Chinese EV maker, Canada-based autobody and repair giant BYD Group (TSX: BYD) has a business model that many investors have reason to be concerned about, when it comes to tariffs.
The company’s core business model revolves around repairing vehicles in its local markets, and the local labour component of its business model won’t be under pressure from tariffs. However, concern around whether vehicles (and their related inputs) will be assigned hefty tariff rates have been enough to pressure this company’s stock, which is now down around 35% from its most recent peak.
I’m of the view that this decline, which is at least in part due to anticipated tariffs, could be more overdone than many in the market think. Again, a significant percentage of the company’s revenue and earnings are derived from labour-driven activities at its shops (outside of the purview of tariffs). With a lower-tariff (or no-tariff) environment for auto parts the likely outcome of this whole debacle, I think this is a stock that’s worth buying on this tariff news as it evolves.
Constellation Software
The second pick I have on this list of growth stocks to consider buying is none other than Constellation Software (TSX: CSU).
In the Canadian software sector, Constellation continues to be among my top picks for a number of key reasons.
Of course, as a leading provider of a range of essential software solutions, Constellation is relatively insulated from trade-related concerns. The company is able to deliver its intangible products and services largely outside of the tariff realm, generating subscription revenues, which have continued to propel its stock price higher.
And with expectation-shattering results coming in quarter after quarter, the company’s stock price chart above continues to emulate that which most investors are after.
Of course, at a share price of roughly $5,000 apiece, this is the furthest thing from a “cheap” stock out there. And the company’s valuation multiple will speak to the premium investors are pricing into this name right now.
But for those seeking relative stability in the realm of growth stocks, this company remains a top pick of mine right now.
