The industrial landscape in Canada continues to be a hidden gem in itself. We need manufacturing industries like these to support our daily lives, whether for heating and cooling our homes or for the future of clean energy production.
What’s even better? These are relatively safe investments given the essential services each provides. Today, we’re going to look at two solid companies that deserve investor attention in the industrial sector.
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HPS
Hammond Power Solutions (TSX:HPS.A) is one of those quiet Canadian success stories that rarely makes headlines but keeps delivering where it counts through growth, profitability, and relevance in a changing world. At its core, Hammond Power designs and manufactures dry-type and cast-resin transformers, the critical equipment that helps safely move electricity from generation sources to the end user. As the world electrifies, Hammond’s products are becoming indispensable.
What sets Hammond apart is its dominance in a niche market. It’s the largest manufacturer of dry-type transformers in North America, serving customers across utilities, OEMs, and heavy industry. Dry-type transformers are safer, more efficient, and environmentally friendlier than traditional oil-filled ones. This technological edge gives Hammond pricing power and a strong competitive moat, especially as utilities and developers shift toward sustainable infrastructure.
Financially, Hammond Power has quietly transformed itself into one of Canada’s most impressive small-cap performers. Over the past few years, its revenue growth has surged thanks to new contracts, international expansion, and higher demand tied to electrification. In its most recent earnings, Hammond reported record revenue and earnings, with profit margins expanding as management keeps costs in check. And yet it continues to trade at just 17 times earnings!
Hammond’s growth runway is long. Governments across North America are spending billions on upgrading electrical grids, while private investment in renewable energy and electric vehicle (EV) infrastructure continues to surge. Every new solar farm, wind turbine, data centre, and electric-vehicle charging station needs reliable power distribution, and Hammond’s transformers sit right at that intersection.
TVK
TerraVest Industries (TSX:TVK) is a rare Canadian industrial name that keeps flying under the radar despite years of quietly compounding earnings and building a dominant niche position. TerraVest manufactures and services industrial equipment across several essential sectors, including energy, heating, transportation, and environmental solutions. Its product lineup ranges from pressure vessels and fuel storage tanks to propane transport trailers, process equipment, and even cryogenic storage systems.
What really sets TerraVest apart is its acquisition-driven growth strategy. Management has spent the past decade buying and improving niche industrial businesses that fit into its broader network. Rather than chasing growth at any cost, TerraVest targets underperforming companies in essential markets, integrates them efficiently, and boosts margins through shared expertise and scale. Many of those acquired businesses throw off consistent cash flow, which TerraVest reinvests in the next opportunity.
Financially, TerraVest’s track record speaks for itself. Over the last five years, the company’s revenue and net income have climbed steadily, and return on equity remains strong, often north of 15%. In its most recent fiscal year, TerraVest reported record earnings and double-digit sales growth, driven by both organic gains and smart acquisitions.
Free cash flow remains healthy, giving management plenty of room to pay down debt, fund expansion, or return capital to shareholders. Plus, TerraVest remains remarkably inexpensive compared with its performance. The stock trades at about 28 times future earnings, despite consistent earnings growth and reliable cash flow.
Bottom line
Industrial stocks like these may not look fancy or exciting, but they are essential. That’s what makes both of these two Canadian stocks clear winners on the TSX today. Whether it’s fuelling your home or powering the clean energy transition, both are safe stocks that aren’t going anywhere.
