2 TSX Stocks With Huge Upside as the U.S. Dollar Strengthens

Investors wanting to protect their future need safe Canadian stocks, like these two on the TSX today.

| More on:
Bitcoin

Image source: Getty Images

When the U.S. dollar gets stronger, Canadian investors often look for companies that earn most of their revenue south of the border. That’s because those U.S. dollars, when converted back into Canadian currency, can result in a nice earnings boost. But not every company is positioned to benefit. Two on the TSX that do stand out right now are Waste Connections (TSX:WCN) and Boyd Group Services (TSX:BYD). Both operate heavily in the U.S., and both have strong businesses that can continue to grow regardless of which direction the loonie goes.

Waste Connections

Waste Connections is a major waste management company that serves customers across North America. While it’s based in Canada, the majority of its revenue comes from the U.S., which means the Canadian stock benefits when the U.S. dollar gains value against the Canadian dollar.

In its most recent earnings report for the first quarter of 2025, Waste Connections reported revenue of US$2.2 billion, up 7.5% from the same quarter in 2024. Net income rose to US$241.5 million, and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) came in at US$712.2 million, also showing solid year-over-year growth. Those numbers reflect strength in pricing and volumes, particularly in its solid waste and recycling segments.

The Canadian stock also saw strong acquisition activity, closing four transactions during the quarter with year-to-date acquired annualized revenue of over US$125 million. Net cash provided by operating activities was US$541.5 million and adjusted free cash flow US$332.1 million. Therefore, Waste Connections has room to invest in further growth or return cash to shareholders. While fuel and labour costs remain a concern, the Canadian stock continues to offset inflation with price increases. That kind of pricing power, along with a boost from U.S. dollar conversion, makes WCN one to watch closely.

Boyd

Boyd Group Services also earns a significant portion of its revenue in the U.S. through its network of collision repair centres. In fact, most of its shops are located in the States, which means its top line is sensitive to currency fluctuations. In the first quarter of 2025, Boyd reported revenue of US$778.3 million, down from US$786.5 million in the same period of 2024. This came with a 1% drop in same-store sales. However, the company was still able to move forward by adding new locations and expanding its network.

Gross profit margins improved to 46.2% from 44.8% a year earlier, helped by better operating efficiencies and a strong parts supply chain. However, adjusted EBITDA dipped slightly to US$80.5 million, and a net loss of US$2.6 million, before adjusted net earnings of US$2.2 million. Management acknowledged that the U.S. labour market remains tight, which has affected technician availability and repair cycle times. Still, the Canadian stock is executing on cost control measures and continues to open new locations. The Project 360 initiative is expected to bring US$30 million in annual savings once fully implemented.

For Canadian investors, the appeal of Boyd is clear. Revenue in U.S. dollars gets translated into more Canadian dollars when the greenback is strong. That helps bolster the financial picture even when growth is a little slower, like it was last quarter. As long as Boyd can keep expanding its network and improving margins, it’s likely to remain a solid long-term hold.

Bottom line

Both WCN and BYD offer strong U.S. exposure, which means they stand to benefit if the U.S. dollar continues to rise. But the currency story isn’t the only reason to buy. These are well-run companies with proven track records, and each has clear plans for future growth. Waste Connections has a strong balance sheet and recurring revenue, while Boyd has a solid foothold in a fragmented industry with room to consolidate.

A stronger U.S. dollar can provide a nice tailwind for these stocks, but it’s the business fundamentals that make them worth considering. For investors looking to ride the wave of a rising greenback without taking on excessive risk, both Waste Connections and Boyd Group Services could be smart picks heading into the rest of 2025.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Boyd Group Services. The Motley Fool has a disclosure policy.

More on Stocks for Beginners

Yellow caution tape attached to traffic cone
Stocks for Beginners

The CRA Is Watching: TFSA Investors Should Avoid These Red Flags 

Unlock the potential of your TFSA contribution room. Discover why millennials should invest wisely to maximize tax-free growth.

Read more »

Young Boy with Jet Pack Dreams of Flying
Stocks for Beginners

3 TSX Stocks Soaring Higher With No Signs of Slowing

Analyze the performance of notable stocks in recent years and how they responded to economic challenges and opportunities.

Read more »

Group of people network together with connected devices
Energy Stocks

A 4.5% Dividend Stock That’s a Standout Buy in 2026

TC Energy stands out for 2026 because it pairs a meaningful dividend with contracted-style cash flows and a clearer, simplified…

Read more »

a person prepares to fight by taping their knuckles
Stocks for Beginners

3 Defensive Stocks That Could Thrive During Economic Uncertainty

Market volatility doesn’t disappear entirely. That’s why owning one or more defensive stocks is key.

Read more »

senior man and woman stretch their legs on yoga mats outside
Dividend Stocks

Passive Income: How to Earn Safe Dividends With Just $20,000

Here's what to look for to earn safe dividends for passive income.

Read more »

Canada Day fireworks over two Adirondack chairs on the wooden dock in Ontario, Canada
Dividend Stocks

Buy Canadian With 1 TSX Stock Set to Boom in 2026 Global Markets

Canadian National could be a 2026 outperformer because it has a moat-like network, improving efficiency, and a valuation that isn’t…

Read more »

Bitcoin
Stocks for Beginners

Here Are My Top TSX Stocks to Buy for 2026

Investing in 2026 requires a smart strategy. Learn how to diversify with TSX stocks amid global turmoil and uncertainty.

Read more »

coins jump into piggy bank
Dividend Stocks

2 Canadian Dividend Giants to Buy Forever and Ever

You don’t need 100 stocks, a couple of dividend giants can do a lot of the heavy lifting if their…

Read more »