It has already been an interesting start for Canadian stocks in 2026. We have seen artificial intelligence (AI) take down software companies (and possibly professional service companies). We’ve seen tariffs, then tariffs struck down, then new tariffs, and then bigger tariffs. We’ve seen gold rocket up and cryptocurrencies crash. It’s only been two months!
Yet, some themes are emerging wherein specific stocks and sectors could outperform. Here are my picks for Canadian stocks that are showing promising signs of upward momentum in 2026.
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Top Canadian defence stock
The Canadian government is starting to deploy some of its promised capital into bettering its defence infrastructure. Canada has underspent on its military for years. Consequently, this spending initiative could be a once-in-a-lifetime opportunity for Canadian-born defence service providers.
Calian Group (TSX:CGY) is at the forefront of this theme. It provides several critical services to the Canadian military, including satcom infrastructure, training and readiness solutions, cyber threat management, and healthcare services.
Currently, around 50% of its revenues are defence-related. However, around 70% of its $1.4 billion backlog is from defence projects.
After a couple of years of underperformance, this Canadian stock appears to be turning a corner. CGY stock is up 38% this year and 73% in the past 52 weeks.
Its valuation is up with its stock price. However, it is not unreasonable at only 17 times earnings. If you want diversified exposure to the defence theme, this is one of the best stocks to buy today.
Real estate stock
With the potential for the dollar to debase given the current global trade environment, hard assets that generate steady cash flows could gain a bid.
Real estate stocks could start to see institutions flood back into the sector. Dream Industrial Real Estate Investment Trust (TSX:DIR.UN) could be a winner from this trend. So far, this stock is up 13% over the past 52 weeks. Yet, it has underperformed other industrial real estate peers.
Recent joint venture partnerships have been temporarily dilutive to Dream’s earnings. It needs to redeploy the capital proceeds from these partnerships to reap the benefits of the deals. The good news is that things are trending in the right direction.
Occupancy has ticked up to 95.5% and it is gaining strong rent uplifts on new leases. The REIT has several new developments that are now generating income and should support earnings in 2026.
Dream still trades at a 20% discount to its private market value. Investors get its operating platform completely free right now.
A top Canadian infrastructure stock
Secure Waste Infrastructure (TSX:SES) is another Canadian stock that has also been on a tear lately. It is up 12% this year and 36% in the past 52 weeks.
Over the past three years, Secure has transformed from a cyclical energy services business to a predictable, high margin waste infrastructure company. It has a crucial waste disposal network that caters to industrial and energy companies across Western Canada.
Even after a strong stock rebound, Secure trades at a material discount to other waste providers. The company has been aggressively buying back stock. Last year, Secure bought back 8% of its shares outstanding. That is after buying back 20% in 2024!
If energy prices continue to rebound, it could see further growth as Canadian energy production volumes increase. This Canadian stock pays a growing 2% dividend today. SES is a nice stock for growth, income, and value.
