What are we looking for?
Top-rated Canadian equities using Trading Central’s Quantamental factor investing methodology.
Riding the momentum of a record-setting S&P/TSX Composite Index, we applied Trading Central’s quantamental filter to uncover Canadian equities that could deliver returns that outperform their benchmark indexes. Quantamental analysis blends fundamental and quantitative research to produce a single score. At Trading Central, this translates into ranking stocks across five factors – value, growth, quality, momentum and income – while adding fundamental context to spotlight companies with the potential for consistent outperformance.
The screen
We began by applying a minimum market capitalization of $1-billion to focus on larger companies with more reliable revenue streams, while filtering out smaller, higher-risk names.
From there, we limited our search to stocks trading within 15 per cent of their 52-week highs, highlighting those with strong price momentum and bullish sentiment – often prime candidates for potential breakouts and sustained uptrends.
Finally, we screened for U.S. equities with a Trading Central Quantamental Rating of 60 or higher, with an additional emphasis on companies scoring 50 or above on the Growth Factor. The Quantamental Rating ranks stocks from 0 to 100, where 100 represents the strongest outlook, based on a blend of valuation, growth, quality, momentum and income metrics.
For context, we’ve also included year-to-date and one-year performance, recent stock price, dividend yield and P/E ratio.
More about Trading Central
Trading Central is a global leader in financial market research and investment analytics for retail online brokers and institutions. Its product suite provides actionable trading ideas based on technical and fundamental research covering stocks, exchange-traded funds, indexes, forex, options and commodities. Strategy Builder, our stock screener, is available through leading retail brokers in Canada and worldwide.
What we found
Topping our list is Toronto-Dominion Bank (TD-T), Canada’s second-largest bank with a market capitalization of $191-billion. TD’s Quantamental Rating of 67, supported by a strong Growth Factor score of 84, reflects its balance of scale and earnings quality. The bank has delivered a solid 46.6-per-cent gain year-to-date, while offering investors a 3.75-per-cent dividend yield, making it a steady performer with both growth and income appeal.
Next worthy mention is Lundin Gold Inc. (LUG-T), a $22-billion miner that has been one of the TSX’s most explosive stories this year. The stock has surged more than 186 per cent year-to-date and over 209 per cent in the past 12 months. Its Growth Factor Rating of 74 highlights the company’s strong earnings trajectory, while a healthy 4.8-per-cent dividend yield adds an income kicker.
We also spotlight Endeavour Mining PLC (EDV-T), valued at $14-billion, with a standout Quantamental Rating of 82 and an impressive Growth Factor Rating of 96. The stock has surged 118.7 per cent year-to-date, reflecting both operational execution and favourable gold prices. With a dividend yield of 2.83 per cent, Endeavour combines momentum, growth and shareholder returns in a compelling package.
Trading Central Strategy Builder provides a backtesting capability to evaluate how well an investing strategy would have worked in the past. Using a five-year historical period with quarterly rebalancing, the screen described had an impressive 21-per-cent annualized total return over five years compared with 13 per cent for the S&P/TSX 60 Composite Index.
The investment ideas presented here are for information only. They do not constitute advice or a recommendation by Trading Central in respect of the investment in financial instruments. Investors should conduct further research before investing.
Gary Christie is head of North American research at Trading Central in Ottawa.
