The signs are there. Canada looks as though resource stocks are making quite the comeback, and there are many reasons behind it. Commodity strength continues to feed into resource equities, pushing up materials and mining stocks. Sector rotation and investor sentiment have shifted towards these resources and cyclical stocks, looking at metal mining, defence, and construction stocks in particular.
Furthermore, value and capital injection look to be improving, with many resource names showing cheap valuations coming into 2025. Meanwhile, it’s all happening outside of Canada as well, with the world’s policies changing to support resources and critical minerals. So, how can investors get in on the action? They can get in by choosing resource stocks like these.
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Cameco
Cameco (TSX: CCO) is a uranium provider benefiting from its core uranium business as well as its downstream investment. This includes its joint venture with Westinghouse, which also provides a connection to Alphabet. And the strength in nuclear and uranium pricing certainly doesn’t hurt.
The future is clearer than ever, especially after earnings. CCO stock reported $321 million in net earnings, with $308 million in adjusted net earnings. Its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) hit $673 million during the quarter, with adjusted EBITDA rising 43% year over year.
Higher sales and volumes continue to improve average realized prices, suggesting that Cameco stock is unlikely to slow down. Its 49% equity share in Westinghouse is a huge win in this area, as are lower costs on sales. So, this is certainly one stock to watch.
TECK
Another to watch is Teck Resources (TSX: TECK.B), with the critical mineral provider making a lot of moves in the last while. The biggest headline? Teck and Anglo American announced they would merge in a “merger of equals” transaction, creating a global copper and critical mineral powerhouse.
The deal would mean Anglo holds 62.4% of the combined entity, and Teck the remaining 37.6%. Meanwhile, Teck stock has been proving its worth as an investment, most recently during its third-quarter earnings. That being said, it did lower guidance for 2025 for its copper production at Quebrada Blanca, and expects higher unit costs.
Looking ahead, production guidance has been scaled back, though it remains optimistic that a recovery is underway. For now, the resource stock has scaled back its copper production, as the segment is under profitability pressure with weaker prices and rising costs. So, while still a large part of the business, management is merely being cautious.
TOU
Finally, we have Tourmaline Oil (TSX: TOU), an energy stock absolutely surging. The company focuses on natural gas through its low-cost Montney development, providing a strong dividend and shareholder returns — all while trading at just 15.4 times earnings.
During its recent quarterly earnings, the energy stock reported strong free cash flow, with earnings per share (EPS) reported at $1.35, beating estimates by almost 40%. Furthermore, revenue came in at $1.51 billion, which was strong but beat estimates. Even so, with a cash flow of $822.8 million, the company can continue supporting its solid $0.50 per share quarterly dividend.
Looking ahead, TOU stock is a solid cash-generating resource stock that offered an EPS surprise. Even with revenue slightly tighter, its strong free cash flow shows the resilience of the company, along with operational excellence. These are critical when investing in resource stocks during a potential rebound.
Bottom line
Resource stocks may not be completely rebounding yet, but don’t let this fool you. These Canadian stocks are due to surge, and right now are merely balancing the books and making deals as this future gets closer. So, if you’re looking for an investment in resource stocks, these are great additions to your watchlist.
