Despite the Canadian stock market hovering around new all-time highs week in and week out, many investors have had trouble getting into it lately. As of this writing, the S&P/TSX Composite Index, which is the benchmark Canadian stock market index, is up by 27.3% from its 52-week low. Granted, this indicates a bull run. However, investing isn’t easy for many right now.
Higher tariffs, trade tensions, and other macroeconomic and geopolitical factors can easily wipe out all the gains across the board faster than you might be able to react. It can be especially bad if your portfolio has a lot of exposure to the US markets. Fortunately, there are some Canadian stocks that might be good investments to consider.
Today, I will discuss a Canadian stock that is up by around 135% from its 52-week low which might offer some shelter for Canadian investors: Bombardier Inc. (TSX:BBD.B).
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Bombardier stock
Bombardier is a leading name in the global aviation industry. The $16.2 billion market-cap company designs, manufactures, and services some of the most exceptional business jets worldwide. The company has a fleet of around 5,000 aircraft around the world, in service with various companies, charter providers, fractional ownership providers, private individuals, and governments.
Bombardier stock was a high flyer in the market before reaching levels at which it seemed difficult to recover, but it seems like it’s here to stay. Around 25 years ago this month, the stock was at an all-time high valuation of $442 per share, but it went as low as $5.26 per share just five years ago. As of this writing, it trades for $165.10, up by over 130% from its 52-week low. Exactly what is happening? Let’s talk about it.
In its first-quarter earnings for fiscal 2025, Bombardier’s performance strengthened support for an upward trend in its share price. The Canadian stock posted US$1.6 billion in revenue, and its earnings before interest and taxes (EBIT) came in at around US$234 million. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) came in at US$318 million. While revenue was up by 10% from the same period last year, and EBITDA was up by around 20%.
Its free cash flow was expectedly negative due to seasonal factors for the quarter, though its full-year guidance is for it to generate up to US$500 million in free cash flow this year.
Foolish takeaway
Years ago, Bombardier let go of its rail and commercial jet operations, shifting focus entirely on its business jets segment. The decision to become leaner and more agile has been paying off, and the company’s aftermarket services are churning a good amount of revenue while providing it with higher margins. The pure-play aviation business also has a growing backlog of orders that stood at US$14.9 billion at the end of the quarter.
As good as things are, it’s important to note that Bombardier also reported a massive US$4.7 billion debt at the end of Q1 2025. Despite this debt load, when considering the overall situation, Bombardier stock isn’t a bad investment to consider at current levels.
Down significantly from its all-time highs, it is a risky stock. However, there is a case to buy and hold for investors with a long-term strategy. The stock is a contrarian bet, but the underlying business is doing well and there’s plenty of upside potential. BBD.B stock might be worth adding to your self-directed portfolio at current levels.
