The Best Industrial Stocks In Canada Right Now
In this series, we reviewed all of the TSX and TSX Venture’s stock and came up with what we think the best candidates are. In this article, we describe the list of the best industrial stocks in Canada, as well as the methodology that got us there.
(Updated Jan 31, 2023) An industrial stock is a company that manufactures and sells goods used in commercial or industrial applications. These companies are typically involved in the production of machinery, equipment, and tools used in manufacturing or other industries.
World renowned industrial stocks are companies like:
- 3M Company
- Caterpillar Inc.
- General Electric Company
- Honeywell International Inc.
There are many different types of industrial stocks. They are categorized based on the products they produce or the industries they serve. As an example, some companies may specialize in the production of heavy machinery used in construction. Others may focus on producing smaller equipment and tools used in manufacturing settings. Additionally, industrial companies are involved in the production of raw materials used in various industries, such as metals or minerals.
Industrial stocks may be traded on major exchanges, such as the New York Stock Exchange. They may also be traded on smaller exchanges designed specifically for companies involved in industrial and commercial businesses. These stocks tend to be more volatile than other types of stocks. Their prices fluctuate based on changes in the economy or global demand for their products.
Investors interested in purchasing industrial stocks should research the companies thoroughly before making any decisions. They should also be aware of the risks associated with these types of investments. They can be subject to sudden and drastic changes.
Methodology For Ranking The Top Industrial Stocks In Canada
To come up with the list, we’ve first made sure that the company has a Return on Equity higher than 12%. This would be a decent standard for any company, and is definitely true of industrial stocks.
We’ve also made sure that the companies on the list had consistent long term revenue growth. Another criteria was positive earnings for the past four years.
We’ve then sorted the top Canadian industrial sector companies by free cash-flow yield – the best metric to differentiate a good from a bad investment, all else being equal – from the highest to the lowest. It only gave us two good enough result to write about, here it is:
- WJX, with an ideal PE ratio of 7, 15.8% free cash-flow yield and 4.5% dividend yield, Wajax Corporation still makes the top of the industrial stocks list. That is even though it increased 17% since we last published this piece;
- MTL, with a PE ratio of 11, 11% free cash-flow yield and a 5.2% dividend yield, Mullen Group Ltd is the last entry at #2. The company is on a path to double it’s pre-pandemic revenue & gross profit, an impressive feat for a stock trading at these levels.
No further entries on all of the TSX and TSX Venture are in that class of Best Industrial Stocks in Canada this time around.
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