2025 was the year of mining and financial stocks. Strong performance in these segments helped drive the TSX upwards 27% to near all-time highs. Yet, these tend to be more cyclical industries. They are trading at all-time high valuations right now, which isn’t promising for future returns.
It is hard to say when the cycle will turnover, but it will at some point. These stocks outperformed in 2025. Yet, it might be time for some other stocks to outperform the market. Here are the three Canadian stocks that I believe could deliver outstanding results in 2026.
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Calian Group: A cheap stock ready to breakout
Calian Group (TSX:CGY) has suffered for a couple of years from inconsistent results. In 2025, it was plagued by issues with its IT and cybersecurity division. The good news is that it appears to be turning a corner.
Fifty percent of Calian’s business is from defence-related activities. It supplies everything from health services to training/readiness planning to ground-to-satellite communication systems.
With Canada set to drastically increase its defence spend in 2026, Calian is expected to see a major boon of new contracts. The company is expecting double digit revenue and EBITDA growth in 2026. Its stock only trades with a low-teens earnings multiple. If it can continue to execute, CGY stock could really start to soar.
Exchange Income: Set for another year of outperformance
Exchange Income Corp. (TSX:EIF) actually delivered a pretty good year in 2025. It is up nearly 36% this year. However, the set up looks good for 2026.
Exchange is very well-positioned to benefit from several tailwinds. Its recent acquisition of Canada North airlines positions it as a dominant transportation leader to Canada’s north. Infrastructure spending to help protect Canada’s arctic sovereignty should translate into higher passenger/freight volumes and more contracts, and provide a boost to its environmental matting businesses.
Likewise, Exchange’s aerospace defence business is gaining momentum from high demand for aerial surveillance activities. It has a bid out for a large long-term project in Australia. Its stock could get a nice boost if it wins the project.
Right now, management is targeting around 14% adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) growth in 2026. That doesn’t factor any major acquisitions (which it regularly completes) or contract wins.
Certainly, its valuation has increased over the year. Yet, given strong execution and great results, the premium looks to be deserved. While you wait for more capital upside, the stock earns an attractive 3.4% dividend that it pays out monthly.
Constellation Software: A top growth stock at a great valuation
Constellation Software (TSX:CSU) has been a major under-performer in 2025. Its stock is down over 25% year to date and 29% over the past 52 weeks. That is the worst drawdown in its history.
Factors like concerns about AI competition, the retirement of its longstanding CEO, slowing capital deployment, and an elevated valuation all contributed to the decline. The good news is that many of these concerns are now well-priced into the stock.
At ~20 times earnings, it is trading near its lowest valuation in seven years. Even though its growth might be slowing to an extent, it is still growing revenues by a 15%-plus rate and EBITDA/free cash flow by a 20%-plus rate.
Constellation still has a huge market to consolidate. It has one of the best management teams in Canada. The recent pullback creates a great opportunity to become shareholders alongside them.
