With the start of the new year comes rebalancing time for many investors. Picking and choosing one’s potential winners for the year ahead is an obsession for some, and a necessity for others. Indeed, given how divergent stock performance has become across sectors and individual names within each sector, some rebalancing probably makes sense (at least annually).
Alas, for those seeking some ideas for new positions to consider adding in January, here are three top Canadian stocks I think are worth diving into right now.
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Sienna Senior Living
In the world of real estate investment trusts (REITs), Sienna Senior Living (TSX: SIA) continues to be a top pick of mine.
The company’s wide-ranging portfolio of retirement homes and living communities for elderly folks has provided incredibly strong and durable cash flow for many years. The thing is, as most investors are probably aware, demographic shifts under the surface are likely to continue to drive strong performance for many decades to come.
The best time to invest in Sienna may have been a decade ago. But the second-best time to consider adding a position in this name is today. That’s mostly because I think the voracious growth catalysts undermining this stock could accelerate in the years to come, with the average age of a baby boomer now hovering around 70.
With a 4.4% dividend yield and a reasonable forward price-to-earnings multiple of roughly 36 times, this is a stock I think is worth its weight in gold right now.
Celestica
One of the top Canadian growth stocks I’ve really warmed up to of late is Celestica (TSX: CLS).
Shares of the Canada-based cloud and AI company have surged over the course of the past year, moving from around $150 per share to kick off 2025 to more than $400 today. In fact, at one point, this stock was pushing the $500 level, so there’s an argument to be made that there’s value in this stock still.
I think such a view is correct, given that shares of CLS stock are changing hands at a multiple of just 38-times forward earnings, despite vastly accelerating earnings and cash flow growth driven by expanding margins. If there was one Canadian growth stock I’d point to as one with the sort of fundamentals to see significant multiple expansion over the course of the next year, it would be Celestica.
With that in mind, investors looking for a top-tier growth stock to buy and hold for a decade have a good one here. On any meaningful dips, this is a stock I’d consider adding more to over the course of the coming years.
Lululemon
I’m cheating on this one, as Lululemon (NASDAQ: LULU) is technically now a U.S. company traded on the Nasdaq.
That said, this is a company that still has a major presence in Canada, was founded in Canada. As far as I’m concerned, Lululemon is still a Canadian stock worth considering.
Of course, looking at the stock chart above, some investors may disagree with me. That’s fair — momentum is clearly not on the side of bulls right now with this high-priced retailer.
However, with continued pressure from insiders and powerful shareholders pushing for change (as well as the ousting of the company’s past CEO), I think Lululemon is more likely than not going to get back on track and see some share price improvement. At around $200 per share for a stock that was trading above the $500 level not long ago, that’s a hefty discount investors shouldn’t ignore.
