It has been an incredible year for many Canadian stocks. The TSX Composite Index has charged up nearly 24% in 2025. That is compared to the S&P 500, which is only up 14% year to date. It has been an exceptional year of outperformance for the TSX.
Beyond metals and mining companies (which have had an incredible resurgence this year), there are several Canadian stocks that have vastly outperformed the index. Some of these are niche, and some of these are well-known. Here are three Canadian stocks that are quietly, but soundly beating the market this year.
A fast-growing Canadian defence stock
A small-cap Canadian stock that has delivered incredible returns is Kraken Robotics (TSXV:PNG). After soaring 88.5% this year, its stock has a market cap of $1.5 billion. Its stock is up 613% in the past five years!
Kraken offers a mix of subsea products, including sonar, imaging, and specialized batteries. The rising use of drones and unmanned subsea vehicles for intelligence and defence has created a very strong demand for Kraken’s products. Today, defence makes up 70% of Kraken’s business.
Revenue has ballooned by 496% in the past five years. Earnings before interest, taxes, depreciation, and amortization (EBITDA) are up over 10X in that period. Its stock is no longer cheap at 73 times earnings. However, its products are market-leading. Given global geopolitical tensions, this Canadian stock could continue to enjoy upside from robust demand ahead.
A new Canadian retail stock that is soaring
Group Dynamite (TSX:GRGD) is the mid-cap stock in this pick. This $6.77 billion Canadian stock had a rocky start after its initial public offering (IPO) in late 2024. Its stock was listed for just over $20 per share in November of last year. Subsequently, fears about Trump’s trade war saw the stock get cut in half to $10.48 by April 2025.
However, the market severely underestimated the quality and operating leverage of this North America-wide women’s apparel retailer. This company has been growing nicely at a 15% compounded annual growth rate (CAGR) for the past three years. Last year, it grew revenues by 21%.
However, sales have exploded this year. In its recent second quarter, same-store sales (organic growth) rose 28.6%. Revenues increased 36.5% and adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) soared 49%. It delivered a stunning EBITDA margin of 39%!
Group Dynamite’s stock is up 347% since its low in April and 226% for the year. At 33 times earnings, the stock is no longer cheap like it was earlier in the year. However, the company still has an attractive pipeline for growth, especially in the U.S. and internationally.
A top bank with a massive rebound
Toronto-Dominion Bank (TSX:TD) is a large-cap Canadian stock that has had an incredible resurgence. Its stock has rallied 48% this year! In fact, it recovered all its losses since its U.S. money-laundering crisis last year. It is now hitting all-time highs.
Last year, at this time, I was pessimistic about this stock. The bank was hit with substantial fines and had to drastically fix some parts of its business. I thought the recovery would take many quarters. The stock declined, and TD’s stock became very cheap, but perhaps for a reason.
With a new CEO in place, the bank has worked quickly to clean up operations, sell non-core assets, and restructure operations and its balance sheet. In its recent third quarter, the bank made good progress on these initiatives and saw profits of $3.34 billion (versus a loss of $181 million in the year prior).
With such strong performance this year, the market is clearly looking forward for TD to return to its premium, top-tier banking performance. That is reflected in the stock price. It trades for 13 times forward earnings today. This Canadian stock is one to watch, but I wouldn’t be buying it here.
