Volatility has become a feature, not a bug, of today’s market. Indeed, this reality has many investors glued to daily headlines instead of long-term fundamentals.
That said, I think the better approach is to build a watch list of growth stocks that can compound cash flows through multiple cycles. With those companies on the radar, investors can then jump at the opportunity to buy, when it arises.
Here are two top Canadian stocks that fit that profile for me right now.
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Enerflex
Enerflex (TSX:EFX) is a company I haven’t covered much in the past, but it’s one top Canadian stock I think could have big upside over the near, medium and long term, given what’s going on in the energy market right now.
Indeed, Enerflex is quietly transforming from a cyclical equipment provider into a contract‑backed energy infrastructure and services business. This business model has led to highly visible cash flows, with the company’s energy infrastructure segment now boasting a backlog of more than $1.4 billion of contracted revenue in the coming quarters. Thus, for investors looking to capitalize on higher demand for modular natural gas processing and produced-water treatment facilities, this is a top option to consider.
Importantly, Enerflex’s After‑market services business layers on high‑margin, recurring revenue tied to its installed base. This further mitigates the impact of capital spending cycles and improves overall return on invested capital. With plenty of momentum seen in recent months supporting the idea that further gains could be on the horizon, this is a top energy-adjacent play I think is worth considering for big upside in 2026 and beyond.
Hammond Power Solutions
Another company I’ve kept on the watch list for a long time, but haven’t discussed as much as I probably should have, is Hammond Power Solutions (TSX:HPS.A).
This company sits at the crossroads of some of the most powerful tailwinds in the market today. Those would be grid modernization, renewable energy, and the build‑out of power‑hungry AI and data‑centre infrastructure.
Indeed, these are powerful growth catalysts, and we’ve seen the kind of robust payout for long-term investors who have held HPS stock for the past five years. I think Hammond is one of the quiet winners in the Canadian market that investors should be paying attention to right now, due to the fact that the company’s key business model (manufacturing dry‑type transformers, power‑quality systems, and magnetic components that are mission‑critical for these projects) could see accelerated growth potential over time.
This past quarter, the company’s surge in its underlying backlog by more than 22% provided investors with enough revenue growth visibility to bid shares higher. I’m of the view that similar such beats are likely to come down the line.
Thus, for investors looking for ways to play the electrification and expansion of digital infrastructure trends we’re seeing play out, Hammond is an excellent option to have on the radar right now, in my opinion.
