Heading into a New Year is an exciting period of time. It’s the holiday season, when we all spend time with family and friends. But after the dinner parties and drinks with friends, some may sit up thinking about how they’re going to plan for the New Year. I think of this year as the “thinking” time of year.
That’s what makes considering new opportunities so important right now. Other investors are thinking the same way and potentially looking to get ahead of what the masses will be buying to reposition their portfolios next year.
Here are two top Canadian stocks I think investors could consider rotating into before we turn the page to 2026.
Canadian Imperial Bank of Commerce
Canada’s fifth-largest bank (and arguably its most overlooked), I’d argue that Canadian Imperial Bank of Commerce (TSX:CM) could be a stock to buy before the year is out.
Why? Well, this is among the best-yielding banks, with a dividend stock profile that’s unmatched. Currently yielding 3.3%, that’s actually better than most of its peers. There are higher yields out there, but it’s CIBC’s core quality, diversity of income streams, and international exposure via recent acquisitions that are really exciting.
The bottom line is that for investors who think financials will have another nice run in 2026, this bank is well-positioned to capture more loan growth and see higher margins thanks to a steepening yield curve. There are many catalysts for CIBC, some of which are priced in, but perhaps not to the degree they should be.
Manulife Financial
Another top stock I think investors are overlooking right now is Manulife Financial (TSX:MFC).
Sure, the insurance industry is relatively boring. But for investors who are looking forward to a year with fewer potential inflammatory headlines, that’s a good thing. Following a stock like Manulife won’t provide those sorts of night sweats, and I’m all for that.
The company has seen robust growth in its core Canadian and international insurance segment, and should continue to see robust growth in the year ahead. Much of that has to do with a steeper yield curve, making the company’s future investments (which offset its future liabilities) more valuable.
In my view, Manulife is really a bet on interest rates continuing to come down. Given the underlying weakness in the jobs market right now, I’m looking to hide out in safe blue-chip names like Manulife here.
