Investors often look to the Toronto Stock Exchange for clues about where Canadian capital is flowing — and right now, three companies jump out from the rest.
Surprisingly, all three belong to the consumer cyclical sector, a part of the market known for its sensitivity to economic swings. Yet each of these stocks has shown resilience, momentum, and long-term potential. Do you own any of them?
1. Linamar
Linamar (TSX:LNR) has been one of the outperformers of 2025. The stock has surged roughly 10% in the past month and a remarkable 40% year to date — not the kind of performance investors usually expect from a traditional auto-parts manufacturer.
But Linamar is far from ordinary. Despite operating in a cyclical industry, the company has demonstrated impressive durability. It remained profitable even during the economic shutdowns of the 2020 pandemic, highlighting disciplined operations and a diversified business model.
The company designs and manufactures precision metallic components, advanced powertrain systems, assemblies, and industrial equipment for automotive, agriculture, energy, and industrial markets. Beyond its core business, Linamar has expanded through acquisitions and even entered the medical-device space — a move that adds stability and growth potential.
Valuation remains a major part of the story. Trading under $79 per share at a blended price-to-earnings (P/E) ratio of about 7.7, the stock still appears inexpensive relative to its double-digit expected earnings growth over the next couple of years. Analysts see about 11% near-term upside, and investors collect a modest but reliable dividend yield of nearly 1.5%. For a company combining growth, value, and resilience, Linamar is a reasonable buy here.
2. Transcontinental
Transcontinental (TSX:TCL.A) has been quietly gaining traction. Shares are up about 5% in the past month and 18% year to date as the company leans into a strategic transformation that started in late 2023.
Traditionally known for printing, Transcontinental has repositioned itself as a major player in flexible packaging — now its largest revenue driver and the business segment with the strongest long-term outlook. The company serves a wide range of industries:
- Food: Packaging for everything from coffee and dairy to frozen foods and pet products
- Consumer goods: Household, industrial, and personal-care packaging
- Medical and agricultural: Specialized films, coatings, and high-performance pouches
With the stock trading under $20 per share, analysts are calling for an impressive 25% upside. While investors wait for the turnaround to continue unfolding, they’re rewarded with a generous 4.5% dividend yield. For income-seekers who believe in the growth of flexible packaging, this is a name worth watching.
3. Magna International
Rounding out the list is Magna International (TSX:MG), a global automotive powerhouse that has climbed about 7% over the past month and 16% so far this year.
Magna’s appeal goes beyond its size and reputation. The company has developed a strong income-investor following thanks to 15 consecutive years of dividend growth. Over the past five and 10 years, dividends have increased at annualized rates of 5.4% and 9.6%, respectively.
Magna manufactures a broad range of auto parts and complete vehicle systems, and it even builds full vehicles for certain automakers. Its growing focus on electric and autonomous-vehicle technologies positions it well for the future of mobility.
Trading under $67 at a blended P/E of around nine and yielding nearly 4.1%, Magna appears fairly valued based on analyst targets — but for long-term investors seeking stability and consistent dividends, the stock remains a reliable cornerstone of the Canadian automotive landscape.
Investors takeaway
So, there you have it – three of the most popular stocks on the TSX today. Investors should tread carefully as they’re in the consumer cyclical sector, which is typically safer to invest in with a multi-year horizon when the stocks correct significantly.
