What are we looking for?
Top Canadian-listed stocks using Trading Central’s quantamental rating methodology.
Canadian stocks surged to fresh all-time highs Wednesday, with the S&P/TSX Composite Index rallying on broad-based strength across technology, basic materials, health care and financial-sector names, a clear signal of continued investor confidence. The rally underscores how resilient Canada’s economy has remained, even as trade tensions linger with the United States.
Against that backdrop, growth watchers expect modest further upside, with many forecasts now suggesting that real GDP will tick up slightly in the next report.
Meanwhile, with inflation easing and the economy holding steady, markets are putting the odds that the Bank of Canada will keep interest rates unchanged in December at 80 per cent, a view that’s helping support continued interest in stocks over bonds.
The screen
We used Trading Central Strategy Builder to identify Canadian-listed stocks that meet a balanced mix of value, quality and fundamental strength. We focused on stocks with a TC quantamental rating of 60 or higher to filter out companies showing weaker underlying factors. The TC quantamental rating evaluates a company using valuation, growth, quality, price momentum and income as its core inputs. Factor investing is a rules-based approach that builds portfolios around specific characteristics that have historically been shown to drive returns or reduce risk.
Additionally, we required a minimum market capitalization of $2-billion to focus on larger, more established companies and screened for price-to-earnings ratios below 20 to highlight stocks trading at valuations cheaper than the broader S&P/TSX Composite.
For reference, we included dividend yield, year-to-date performance and one-year price performance.
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, one of Canada’s largest and most diversified financial institutions. As the largest company in our screen, with a $200-billion market cap and a strong quantamental rating of 66, TD posts a compelling P/E ratio of 10.03, a 3.6-per-cent dividend yield and a 53.1-per-cent year-to-date gain, underscoring strengthening sentiment toward Canadian financials.
Next on the list is Centerra Gold CG-T, a Canadian-based gold producer with operations in Turkey and North America and a growing development pipeline. Centerra carries the highest quantamental rating on the screen at 76, supported by an attractive P/E ratio of 7.99 and impressive performance, up 113.8 per cent year-to-date and 116.1 per cent over the past year.
Also notable is DPM Metals DPM-T, a midtier precious metals producer known for its high-quality mining operations and strong execution. DPM has a quantamental rating of 64 and delivers the best overall price performance, with a 183.6-per-cent year-to-date gain and 191.2-per-cent return over the past year, underscoring the continued leadership of the materials sector.
For investors who want broader exposure to the same quantamental principles used in our stock screen, the recently launched Solactive TC Quant CA 50 Index applies Trading Central’s full quantamental methodology to the Canadian market.
The index selects the top 50 Canadian-listed companies with the strongest blend of valuation, growth, quality, momentum and income – the exact framework behind TC’s quantamental rating. Performance has been exceptional: The index is up 45.52 per cent year-to-date, with a long-term annualized return of 50.07 per cent since inception (backtested). It tracks a simple, rules-based way to own a diversified portfolio built on the same strategy highlighted in this Number Cruncher.
The investment ideas presented here are for information purposes only. They do not constitute advice or a recommendation by Trading Central with respect to investment in financial instruments. Investors should conduct further research before investing.
Gary Christie is head of North American research at Trading Central in Ottawa.
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