Despite the ongoing trade war, the Canadian equity market has maintained its upward trajectory, with the S&P/TSX Composite Index up 22.7% year to date. Strong quarterly earnings and lower interest rates have boosted Canadian equities. With investor optimism on the rise, these four outperforming stocks present compelling buying opportunities.
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Celestica
Celestica (TSX:CLS) is one of the top-performing Canadian stocks this year, with returns of around 213%. Its impressive quarterly performance and upward revision to this year’s guidance appear to have boosted investor confidence, driving its stock price higher. Despite the substantial increase in its stock price, the company’s valuation looks reasonable, with its NTM (next-12-month) price-to-sales multiple standing at 2.7.
The rapid adoption of artificial intelligence (AI) is driving a surge in computing power needs, prompting hyperscalers to ramp up data centre expansion. These expansions have fueled greater demand for Celestica’s products and services, thereby creating long-term growth potential for the company. Additionally, the company continues to launch innovative product offerings to strengthen its market share. Taking these factors into account, Celestica appears well-positioned to sustain strong financial performance in the years ahead, making it an attractive buy at current levels.
5N Plus
Another strong performer this year is 5N Plus (TSX:VNP), which is up roughly 160% year to date. Its impressive performance in the first two quarters has boosted its stock price. In the first six months, the company generated $184.2 million in revenue — a 10-year high and a 32% increase from the previous year. Its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) grew 75.7% to $43.85 million, while its EBITDA margin stood at 23.8%, a 4.9% increase from the previous year’s quarter.
Meanwhile, demand for specialty semiconductors is likely to remain strong as terrestrial renewable energy and space solar power markets continue to expand. With its global footprint, robust sourcing capabilities, and high-quality product offerings, the company is well-positioned to navigate the uncertain geopolitical landscape. Overall, these strengths support the continued momentum in 5N Plus’s financial performance and stock price.
Shopify
On the back of its impressive quarterly performances, Shopify (TSX:SHOP) has outperformed the broader equity markets this year, with returns of 58.3%. Meanwhile, the demand for the company’s products and services is rising as more enterprises adopt an omnichannel selling model. The company continues to develop and launch new products to meet its customers’ evolving needs, as the ongoing trade war presents new challenges for small- and mid-sized enterprises.
Shopify has also expanded its payments platform into additional markets and rolled out upgraded capabilities for cross-border transactions, allowing merchants to accept multiple currencies more easily. The company is also investing heavily in AI to develop new products that expand its customer base and support future growth. Moreover, it expects AI adoption to enhance operational efficiency and strengthen profitability. Given its strong growth outlook, I believe Shopify’s stock price could continue to rise.
Dollarama
Another TSX stock that has outperformed the broader equity markets is Dollarama (TSX:DOL), which has delivered 32.8% returns this year. Along with its impressive quarterly performances, its expansion to the Australian retail market through the acquisition of The Reject Shop has boosted its stock price. Meanwhile, the Montreal-based retailer aims to expand its store base to 2,200 locations in Canada, up from 1,665, and to 700 locations in Australia, up from 395, by the end of fiscal 2034. With its capital-efficient business model, short payback periods, and low maintenance capex requirements, this expansion strategy can drive growth across both revenue and earnings.
Dollarama also holds a 60.1% stake in Dollarcity, which operates 658 stores across Latin America and plans to expand to 1,050 locations by fiscal 2031. Additionally, Dollarama has the option to increase its ownership to 70% by the end of 2027. Therefore, I expect Dollarcity’s contribution towards Dollarama’s net income to grow in the coming years. Considering its healthier growth prospects, I believe Dollarama would be an excellent buy right now.
