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

diversification and asset allocation are crucial investing concepts
Stocks for Beginners

The 3 Stocks I’d Buy and Hold Into 2026

Strong earnings momentum and clear growth plans make these Canadian stocks worth considering in 2026.

Read more »

pig shows concept of sustainable investing
Dividend Stocks

Your 2026 TFSA Game Plan: How to Turn the New Contribution Room Into Monthly Cash

With the 2026 TFSA limit at $7,000, a simple “set-and-reinvest” plan using cash-generating dividend staples like ENB, FTS, and PPL…

Read more »

Nurse talks with a teenager about medication
Dividend Stocks

A Perfect January TFSA Stock With a 6.8% Monthly Payout

A high-yield monthly payer can make a January TFSA reset feel automatic, but only if the cash flow truly supports…

Read more »

warehouse worker takes inventory in storage room
Tech Stocks

Boost the Average TFSA at 50 in Canada With 3 Market Moves This January

A January TFSA reset at 50 works best when you automate contributions and stick with investments that compound for years.

Read more »

where to invest in TFSA in 2026
Stocks for Beginners

TFSA 2026: The $109,000 Opportunity and How Canadians Should Invest It

Here's how to get started investing in a TFSA this year.

Read more »

top TSX stocks to buy
Stocks for Beginners

The Best TSX Stocks to Buy in January 2026 if You Want Both Income and Growth

A January TFSA reset can pair growth and “future income” by owning tech compounders that reinvest cash for years.

Read more »

A Canada Pension Plan Statement of Contributions with a 100 dollar banknote and dollar coins.
Dividend Stocks

Retirees, Take Note: A January 2026 Portfolio Built to Top Up CPP and OAS

A January TFSA top-up can make CPP and OAS feel less tight by adding a flexible, tax-free income stream you…

Read more »

Happy golf player walks the course
Tech Stocks

The January Reset: 2 Beaten-Down TSX Stocks That Could Stage a Comeback

A January TFSA reset can work best with “comeback” stocks that still have real cash engines, not just hype.

Read more »