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.

Amy Legate-Wolfe

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote: “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published July 9, 2025 4:20 pm EDT

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.