Top 10 Best Performing Canadian Stocks in 2024
In the first half of 2024, Canada's market showed strong resilience despite global uncertainties. By early 2024, inflation was slowing down, with January's Consumer Price Index (CPI) rising by only 2.9% compared to the previous year—the smallest increase since June 2023. By Jun 2024, the Bank of Canada lowered interest rates, suggesting the country might be overcoming inflation challenges.
The Canadian stock market showed strong performance, especially in the energy and technology sectors in the first half of 2024. With improving economic conditions and supportive policies, the market has offered numerous investment opportunities for investors. This growth reflects the overall strength of the Canadian economy during this period.
This article will get into an analysis of the Canadian stock market's performance during the first half of 2024 and discuss the investment prospects that it holds.
How are Canadian stocks performed in the first half of 2024
On the last trading day of 2023, the S&P/TSX Composite Index closed at 20,958.44 points. On the last trading day of the first half of 2024, the index closed at 21,875.79 points, marking an approximate increase of 4.38% for the first half of this year. Reviewing the trend of the index since the beginning of the year, its performance has been consistently positive.
It is evident that since entering 2024, the Canadian stocks have demonstrated a robust performance overall. Not just for the first half of the year, this strong performance has continued to the present and also holds potential for future growth. Analyzing the reasons behind this, it may be highly related to the following factors.
The rebound in commodity prices
In the first half of the year, prices of precious metals, copper, and oil and gas resources have seen an increase, ranking among the top gains in global major assets. As a country that exports resources, the extraction and export of oil and gas resources and precious metals hold an important position in Canada's economic system. The rise in the prices of these commodities has a positive impact on the profits of related companies, thereby pushing up the energy and raw material sectors in the equity market.
The Bank of Canada's interest rate cut
On June 5th, the Bank of Canada announced a rate cut, which, despite being in the middle of the year, was already anticipated by the market. This move had a positive impact on market sentiment from the beginning of the year. The rate cut reduced borrowing costs, stimulating consumption and business investment, and providing momentum for the stock market to rise.
The global economic recovery
Since the beginning of the year, the global economy has shown signs of recovery. The pick-up in global trade volume, along with positive changes in the Manufacturing Purchasing Managers' Index (PMI) across various countries and regions, indicates that manufacturing output and the number of new orders are increasing. This reflects the strengthening of market demand and the activity in production. The increase in international trade activities has also brought benefits to Canadian companies that rely on exports.
Top 10 best performing Canadian stocks
Below is a list of the top ten Canadian stocks with a market capitalization exceeding $10 billion, ranked by their year-to-date gains as of June 24, 2024.
First Quantum Minerals Ltd (FM)
Sector: Metals & Mining
First Quantum Minerals Ltd is a diversified mining company engaged in mineral exploration, development, and extraction. The company operates mines in Panama, Zambia, Australia, Turkey, and other locations, producing concentrates, copper, nickel, gold, zinc, silver, and other minerals. Its mine in Cobre Panama provides a significant portion of its revenue.
This year, the company has maintained a stable, albeit slight, increase in revenue each quarter, although it has declined year-on-year. The net profit for the third quarter was $53 million(USD), which is a significant improvement compared to the previous three quarters.
Atkinsrealis Group Inc (ATRL)
Sector: Construction
Atkins Realis is a professional project management company for engineering projects, offering services that include financing, consulting, procurement, construction, operations, and maintenance, covering the entire process of project engineering and management. The markets served by the projects include construction, industry, mining, nuclear energy, power, transportation, and more.
The company has good financial data, with stable and slightly increasing operating revenue for several consecutive quarters. In the second quarter of this year, the net profit was $88.134 million(CAD), a year-on-year increase of 30.60%.
Lundin Mining Corp (LUN)
Sector: Metals & Mining
Lundin Mining is a diversified metal mining enterprise with a global footprint, active in nations including Argentina, Brazil, Chile, Portugal, Sweden, and the United States. The company's primary commodities are copper, zinc, gold, and nickel, with copper accounting for 70% of its main revenue.
In the second quarter of this year, the company's main operating revenue was $1.084 billion(USD), a year-on-year increase of 84.12%; the net profit achieved was $156.733 million, a year-on-year increase of 155.67%.
Ivanhoe Mines Ltd (IVN)
Sector: Metals & Mining
Ivanhoe Mines is a mining company focused on emerging markets, particularly the development of mines in Africa. The company's main projects are four located in southern Africa, extracting metals such as gold, copper, nickel, zinc, and silver.
In the second quarter of this year, the company achieved a net profit of $66.516 million(USD), which, although a decrease of 23.71% year-on-year, represents a significant increase compared to the first quarter.
Kinross Gold Corp (K)
Sector: Metals & Mining
Kinross Gold Corp is a gold production company headquartered in Canada, operating mines in the United States, Brazil, Chile, Mauritania, and Canada. In February of this year, Kinross acquired the Great Bear project and completed a preliminary economic assessment of the project in September, with an annual output exceeding 500,000 ounces. Kinross's annual production in 2023 was approximately 2.2 million ounces, and it is expected to grow significantly in the future.
The company has shown strong financial performance this year, with second-quarter operating revenue of $1.22 billion(USD), a year-on-year increase of 11.65%; and a net profit of $208.9 million, a year-on-year increase of 38.66%.
Pan American Silver Corp (PAAS)
Sector: Metals & Mining
Pan American Silver Corp is a world-class silver and gold producer, listed on the New York and Toronto Stock Exchanges. The company is primarily engaged in the exploration, development, and operation of silver and gold, and the mines it operates also extract and sell zinc, lead, and copper ores. All of the company's operating mines are located in various countries in the Americas.
In the second quarter of this year, the company's operating revenue was $686 million(USD), a year-on-year increase of 7.25%. The growth in revenue is gradually making up for net losses from previous years. The net loss for the second quarter was ＄21.4 million, a decrease of about 30% compared to the previous quarter.
Dollarama Inc (DOL)
Sector: Retail
Dollarama is one of Canada's largest discount retailers, primarily selling a variety of everyday items, seasonal products, and confectionery. The company is known for its fixed-price model and extensive product selection. Its stores are located across Canada and are all directly owned and operated by the company.
In the second quarter, the company's operating revenue was $1.563 billion(CAD), a year-on-year increase of 7.38%; net profit was $286 million, a year-on-year increase of 16.35%.
Agnico Eagle Mines Ltd (AEM)
Sector: Metals & Mining
Agnico Eagle is a gold mining company with operations in Canada, Mexico, Finland, and Australia. It has decades of experience in gold production and is one of the world's leading gold producers, with gold production exceeding 3.4 million ounces in 2023.
The company has a healthy financial performance, with stable growth in operating revenue for several consecutive quarters. In the second quarter of this year, the revenue was $2.077 billion(USD), a year-on-year increase of 20.86%; the net profit was $472 million, a year-on-year increase of 45.83%.
Fairfax Financial Holdings Ltd (FFH)
Sector: Insurance
Fairfax is a financial holding company with a business scope that covers property and casualty insurance, reinsurance, and investments. Its operations span Canada, the United States, and other international markets. Additionally, Fairfax owns some non-financial businesses, primarily in the restaurant sector.
In the second quarter of this year, Fairfax's operating revenue was $6.802 billion(USD), a year-on-year increase of 23.55%; net profit was $1.056 billion, a year-on-year increase of 27.34%.
Cameco Corp (CCO)
Sector: Other Energy Sources
Cameco is one of the world's largest uranium producers, with its main business focused on the exploration, mining, refining, and sales of uranium. In addition to uranium production, Cameco also provides nuclear fuel services, including uranium conversion, uranium enrichment, and fuel assembly manufacturing. The company is also involved in other parts of the nuclear fuel cycle, such as decommissioning services and waste management.
In the second quarter of 2024, Cameco achieved growth in its performance, with operating revenue of $598 million(CAD), a year-on-year increase of 24.16%; net profit was $36.008 million, a year-on-year increase of 162.97%.
The bottom line
The Canadian stock market made a strong showing in the first half of 2024, particularly with significant growth in the resource sector, represented by metal mining. However, despite the resilience and potential demonstrated by the Canadian market, investors should still be aware of the risks associated with market volatility. The global economic environment remains uncertain, and the market could be affected by political and economic events both domestically and internationally. Therefore, investors should make investment decisions cautiously based on their own risk preferences and investment objectives, and continue to monitor market trends as well as the fundamentals of companies. A well-diversified investment portfolio can help mitigate the potential negative impacts of market fluctuations.