Shares of Canadian companies in sectors such as banking, energy, artificial intelligence (AI), and power and utility are trading near their highs. Despite the rally, shares of a few high-quality Canadian stocks are still a great deal. The upward momentum in these stocks is likely to sustain due to multi-year demand trends and a significant backlog.
Against this backdrop, here is a Canadian stock that is up 109% year-to-date and is still a compelling investment.
Source: Getty Images
Hammond Power Solutions: This TSX stock more than doubled
After more than doubling in value this year, Hammond Power Solutions (TSX: HPS.A) remains one of the best-performing stocks on the TSX Composite Index. The rally in Hammond stock is driven by the company’s strong financial results, backed by robust demand for its custom power products, particularly from data centre projects, alongside favourable pricing and strong execution.
The company is a leading manufacturer of dry-type transformers and power quality solutions, serving a diverse range of industries, including renewable energy, industrial manufacturing, commercial construction, transportation, and digital infrastructure.
As investment in data centres and grid modernization accelerates, Hammond is benefiting from strong demand for customer power products, which will help support the rally in its share price.
Into Hammond’s solid Q1 performance
Hammond started 2026 on a strong note, with first-quarter results highlighting sustained demand across its diversified customer base. The primary growth driver remained the data centre market, where rising investment in AI infrastructure and cloud computing continues to increase demand for electrical equipment.
Hammond’s quarterly revenue rose to $264.8 million, supported by higher shipments of custom-engineered products, strong demand in the U.S. and Mexico, and continued momentum in data centre projects. More importantly, order activity remained healthy, with the company’s backlog surging 94.6% year over year. A growing backlog provides greater revenue visibility and supports the company’s ongoing capacity expansion in Mexico.
While tariffs and higher input costs continued to pressure profitability, Hammond’s ability to raise prices and improve operational efficiency cushioned its bottom line. Hammond’s adjusted earnings increased 29.7% year over year to $2.08 per share, reflecting higher sales volumes and improved operating leverage.
Hammond stock to sustain momentum
Hammond stock appears well-positioned to extend its impressive momentum as demand remains strong across data centres, industrial projects, and grid infrastructure. Further, expanding manufacturing capacity and a healthy order backlog provide a solid foundation for continued revenue and earnings growth.
Hammond is also executing well on its long-term growth strategy. Its acquisition of AEG Power Solutions strengthens its technology portfolio, expands its international presence, and adds valuable aftermarket and service capabilities.
Further, Hammond continues investing in manufacturing capacity and operational improvements that should support future sales growth while boosting profitability. Its disciplined pricing, favourable product mix, lower engineering and procurement costs, and greater manufacturing efficiency position it well to expand margins as production volumes increase. Together, these initiatives will enable Hammond to deliver strong earnings growth, which justifies its higher valuation multiple.
Overall, with robust end-market demand, strategic acquisitions, expanding production capacity, and improving operational efficiency, Hammond’s growth story is far from over.
