Stock selection is crucial, especially when economic conditions are uncertain. U.S.-initiated tariffs in 2025 heightened market volatility in global stock markets. Even shares of Canadian companies providing essential products and services are under pressure. However, the TSX withstood the massive headwinds and posted multiple record highs in late May and early June.
The market pullback at the beginning of the year opened buying opportunities. Investors can capitalize on the comeback of two TSX stocks. GFL Environmental (TSX:GFL) and Superior Plus Corp (TSX:SPB) are solid buys following their stellar first-quarter results.
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Environmental services
GFL Environmental is up 5.47% year to date but is well-positioned to pick up steam in the second half of 2025. Market analysts’ 12-month high price target is $87 (+28.8% upside). This industrial stock trades at $67.54 per share and pays a modest 0.13% dividend.
The $24.83 billion Vaughan, Ontario-based firm is North America’s fourth-largest diversified environmental services company. It provides solid waste management services through facilities across Canada and 18 U.S. states. GFL’s strong position in the environmental services sector and free cash flow (FCF) profile makes it an attractive investment option.
In the three months ending March 31, 2025, net income reached $3.4 billion versus the $176.5 million net loss a year ago. While revenue rose nearly 9% to $1.56 billion compared to the first quarter (Q1) of 2024, the net loss from continuing operations increased 9.24% year over year to $213.9 million. Adjusted FCF at the quarter’s end was $13.7 million.
Patrick Dovigi, founder and CEO of GFL, said the impressive financial performance reflects a resilient business model. The company delivered better-than-expected results, notwithstanding the increased macroeconomic volatility and unusually challenging weather conditions.
According to management, the asset base is strategically positioned and could generate over $3 billion in Adjusted EBITDA by 2028 ($2.25 billion in 2024). Also, GFL’s Adjusted FCF growth outlook is favourable. It ballooned from $360 million in 2020 to $826 million in 2024, a compound annual growth rate (CAGR) of 22.9%.
Energy distribution
Superior Plus has advanced +24.18% from year-end 2024. If you invest today, the share price is $7.88, accompanied by a dividend yield of 2.28%. Investors can earn in two ways: price appreciation and dividend income. The $1.83 billion company distributes propane, compressed natural gas (CNG), renewable energy, and related products and services to customers in Canada and the United States. The residential, commercial, utility, agricultural, and industrial customers connect to a low-carbon fuel pipeline.
In Q1 2025, total revenues increased 12.33% year over year to US$1 billion, while net earnings jumped 71.83% to US$146.4 million compared to Q1 2024. Its president and CEO, Allan MacDonald, notes the growth in volumes and profitability of the propane segment. The CNG business registered a record adjusted EBITDA of US$55.1 million.
Management stated that the markets of Superior Plus present significant longevity and long-term opportunities. The propane market is fragmented, but volume is stable and growing. However, its market share in the CNG market is 44%. The volume is expected to grow by 9% CAGR by year-end 2030.
Ideal long-term holdings
GFL Environmental and Superior Plus are ideal and relatively safe long-term holdings. Their respective businesses (environmental services and energy distribution) are not only essential but enduring as well.
