Did you know that Canadian companies are actually thriving amid our nation’s trade tensions with Donald Trump’s U.S. administration?
It might seem strange but it’s true. Canadian stocks vastly outperformed the U.S. market last year, rising about 30% for the full year. This year, the TSX composite index is outperforming the S&P 500 even more, being in a slight bull market while the S&P remains down for the year.
Certainly, some individual Canadian companies are getting hit hard this year. Those that manufacture cars, steel, aluminum and lumber are feeling the pinch. Luckily, those companies are only a small minority among TSX listed equities, by number as well as by collective market cap. Many Canadian companies are actually doing quite well this year. In this article, I’ll explore a few of them, specifically in the banking and energy sectors.
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Banking
TSX banks are doing notably well this year. Over the last 12 months, the banks rose 57% as a group. In 2025, for the full year, they rose 40%. 2025 was a pretty great showing for the Canadian financial sector as a whole, with Brookfield Corp, for example, also delivering record earnings and good stock price performance.
Why did Canadian banks do so well last year?
We can examine that by reference to a case study:
The Toronto-Dominion Bank (TSX: TD). TD Bank started off the year pretty weak, at $78 – low by historical standards, and barely up at all over the preceding five years. The low price came about largely because TD had been fined and had its assets capped by regulators late in the preceding year.
Investors didn’t expect much from TD Bank early in 2025. Throughout the year, though, things started to look better. The bank brought in $66 billion in revenue for the year, an all-time high. It earned $21.7 billion, also an all-time high. It increased its dividend by 3%. Overall, the bank exceeded expectations, growing by high percentages while buying back considerable amounts of its own stock. In the end, it delivered a blockbuster performance, rising 70% for the year, or 70% with dividends re-invested. By the way, the stock continues outperforming this year, up 6% with the North American markets down slightly.
Energy
Another Canadian sector that is doing pretty well this year is energy. Energy stocks are, of course, gaining from the massive rise in the price of crude we’ve been observing lately.
A terrific case study here is Suncor Energy (TSX: SU). SU stock rose all through 2025, ending the year up 20% – behind the TSX, but well ahead of the overall North American markets. Following its strong 2025 performance, Suncor really started to shine in 2026, rising 41% in a few short months. Evidently, investors thought the rising price of crude was sure to raise SU’s fortunes. In this case, there was not much fundamental data to explain what was going on; mostly, the price of crude oil was what drove the price higher. The most recent Suncor earnings were pretty good, with earnings up nearly 100%, though earnings for full year 2025 didn’t change much. What did change was the price of a barrel of Canadian crude, and with it Suncor’s expected first quarter earnings results, which will be released later this quarter.
