2 Stocks That Might Benefit from the Canada-US Trade Wars
The ongoing trade tensions between Canada and the United States have created uncertainty for many industries. However, some Canadian companies are positioned to benefit from this evolving landscape. With tariffs impacting imported goods and trade flows, businesses with strong domestic operations and resilient supply chains stand to gain.
Two stocks that could benefit from these trade shifts are Canadian Tire Corporation (CTC.A) and Fortis Inc. (FTS). Canadian Tire has a well-established domestic retail network with minimal reliance on U.S. imports, while Fortis operates as a utility company largely shielded from trade policy disruptions.
Canadian Tire Corporation (TSE: CTC.A) – A Strong Domestic Retailer
Canadian Tire Corporation (CTC.A) is one of Canada’s largest and most recognizable retail brands. With a diversified portfolio of retail businesses, including Canadian Tire, SportChek, Mark’s, and Party City Canada, the company operates primarily within the Canadian market.
Key Products and Services
1. Retail Operations
- Operates over 1,700 stores across Canada under various brands.
- Product categories include automotive, sports, apparel, home improvement, and outdoor essentials.
2. Financial Services
- Provides Canadian Tire Bank credit cards and financial products.
- Generates revenue from credit card interest, making it a stable cash flow segment.
3. E-Commerce and Loyalty Programs
- Offers an expanding e-commerce platform with home delivery and in-store pickup options.
- The Triangle Rewards Program strengthens customer retention and spending.
Canadian Tire (CTC.A): Positioned Above Key SMAs
With a strong domestic presence and consistent revenue growth, Canadian Tire’s stock has performed well despite broader market volatility.
Why Canadian Tire Could Benefit from Trade Tensions
- Higher Demand for Canadian-Sourced Goods – With potential tariffs on U.S. imports, consumers may turn to Canadian-based retailers for better pricing and availability.
- E-Commerce Growth – Increased online shopping activity helps Canadian Tire capture more market share in the domestic retail space.
- Stable Financials – Strong earnings growth, consistent dividend payouts, and efficient cost management make CTC.A an attractive investment.
Stock Performance Analysis: Canadian Tire Corporation (TSE: CTC.A)
| Metric | Value |
|---|---|
| 1-Year Stock Growth | +21.4% |
| Dividend Yield | 3.8% |
| Forward P/E | 12.64x |
| Price/Book | 2.14x |
Peer Comparison: Canadian Tire Corporation (CTC.A) vs. Competitors
| Code | Name | GIC Sector | Market Cap | Beta | 52-Week High | 52-Week Low | 50-Day MA | 200-Day MA | Shares Short | Short Ratio | Short Percent |
|---|---|---|---|---|---|---|---|---|---|---|---|
| MNS | Royal Canadian Mint – Canadian Silver Reserves | Consumer Discretionary | — | 0.33 | 27.75 | 15.69 | 24.58 | 23.74 | 0 | 0.00 | — |
| ATD | Alimentation Couchen Tard Inc A | Consumer Discretionary | 72.76B | 0.889 | 86.88 | 71.31 | 78.82 | 77.86 | 4,476,052 | 4.73 | — |
| QSR | Restaurant Brands International Inc | Consumer Discretionary | 40.28B | 0.962 | 109.50 | 86.06 | 93.56 | 95.77 | 1,909,322 | 1.53 | 0.0069 |
| DOL | Dollarama Inc | Consumer Discretionary | 38.58B | 0.543 | 152.87 | 97.87 | 140.53 | 133.41 | 1,715,334 | 3.34 | 0.0114 |
| QSP-UN | Restaurant Brands International LP | Consumer Discretionary | 30.00B | 0.865 | 107.80 | 87.11 | 93.83 | 95.53 | 59 | 1.31 | — |
| MG | Magna International Inc | Consumer Discretionary | 15.53B | 1.604 | 77.59 | 51.34 | 60.79 | 59.59 | 5,626,883 | 6.59 | 0.0127 |
| GIL | Gildan Activewear Inc. | Consumer Discretionary | 11.57B | 1.604 | 76.20 | 43.58 | 69.83 | 60.15 | 921,830 | 2.59 | 0.0069 |
| CTC-A | Canadian Tire Corporation Ltd. | Consumer Discretionary | 9.34B | 1.329 | 168.00 | 120.39 | 157.05 | 149.05 | 833,373 | 3.84 | 0.0205 |
| CTC | Canadian Tire Corporation Ltd. | Consumer Discretionary | 8.74B | 1.329 | 268.98 | 190.64 | 220.44 | 225.87 | 1,031 | 1.92 | — |
| ATZ | Aritzia Inc | Consumer Discretionary | 7.70B | 1.844 | 73.44 | 31.82 | 56.56 | 45.64 | 1,526,040 | 4.14 | 0.0271 |
This peer comparison table provides an overview of Canadian Tire Corporation (CTC.A) and its competitors in the Consumer Discretionary sector. The table includes market capitalization, stock volatility (Beta), recent stock performance, and short interest data. Canadian Tire Corporation remains a key player in this sector alongside companies such as Dollarama, Aritzia, and Restaurant Brands International, showcasing strong financial positioning within the industry.
Valuation Metrics: Canadian Tire Corporation (TSE: CTC.A)
| Metric | Current | 9/30/2024 | 6/30/2024 | 3/31/2024 | 12/31/2023 | 9/30/2023 |
|---|---|---|---|---|---|---|
| Market Cap | 10.5B | 9.7B | 9.3B | 8.9B | 8.6B | 8.2B |
| Enterprise Value | 12.7B | 11.4B | 10.8B | 10.2B | 9.9B | 9.4B |
| Price/Sales | 1.52x | 1.41x | 1.38x | 1.35x | 1.31x | 1.29x |
| Price/Book | 2.14x | 2.02x | 1.98x | 1.93x | 1.89x | 1.85x |
Fortis Inc. (TSE: FTS) – A Resilient Utility Play Amid Trade Volatility
Fortis Inc. (FTS) is a leading North American electric and gas utility company, operating primarily in Canada. The company’s regulated business model ensures stable revenue generation, making it a safe haven investment during economic uncertainty and trade disruptions.
Key Advantages in the Trade War Scenario
- Limited Exposure to Trade Risks – Fortis operates in the domestic utilities sector, meaning tariffs and cross-border trade tensions have minimal impact on its operations.
- Stable and Growing Dividends – Fortis has a 50-year dividend growth streak, making it an attractive income-generating stock.
- Strong Balance Sheet – The company maintains low debt levels and consistent earnings growth, ensuring long-term financial health.
Stock Performance Analysis: Fortis Inc. (TSE: FTS)
| Metric | Value |
|---|---|
| 1-Year Stock Growth | +8.9% |
| Dividend Yield | 4.5% |
| Forward P/E | 17.94x |
| Price/Book | 1.78x |
Peer Comparison: Fortis Inc. (FTS) vs. Competitors
| Code | Name | GIC Sector | Market Cap | Beta | 52-Week High | 52-Week Low | 50-Day MA | 200-Day MA | Shares Short | Short Ratio | Short Percent |
|---|---|---|---|---|---|---|---|---|---|---|---|
| FTS | Fortis Inc. | Utilities | 31.09B | 0.226 | 63.75 | 49.49 | 60.95 | 58.38 | 8,035,851 | 5.12 | 0.0119 |
| H | Hydro One Ltd | Utilities | 27.12B | 0.341 | 48.05 | 36.73 | 44.69 | 43.13 | 3,021,141 | 3.59 | 0.0335 |
| BIP-UN | Brookfield Infrastructure Partners L.P. | Utilities | 22.03B | 1.053 | 49.99 | 33.07 | 46.96 | 43.95 | 598,784 | 1.45 | 0.0029 |
| BEP-UN | Brookfield Renewable Partners L.P. | Utilities | 20.93B | 0.895 | 40.84 | 27.00 | 32.96 | 34.68 | 812,728 | 2.85 | 0.0036 |
| EMA | Emera Inc. | Utilities | 16.17B | 0.339 | 56.33 | 42.88 | 53.81 | 50.41 | 11,206,202 | 4.48 | 0.0389 |
| CPX | Capital Power Corporation | Utilities | 7.27B | 0.646 | 68.04 | 32.61 | 61.08 | 48.44 | 2,276,863 | 2.67 | 0.0111 |
| BIPC | Brookfield Infrastructure Corp | Utilities | 7.22B | 1.417 | 63.52 | 38.79 | 58.63 | 53.71 | 1,100,722 | 7.75 | 0.0154 |
| BEPC | Brookfield Renewable Corp | Utilities | 6.95B | 1.008 | 48.28 | 28.80 | 40.46 | 40.60 | 1,335,355 | 5.12 | 0.0128 |
| CU | Canadian Utilities Limited | Utilities | 6.91B | 0.66 | 36.98 | 28.18 | 34.91 | 33.32 | 2,061,177 | 2.98 | 0.0461 |
| ACO-Y | ATCO Ltd. | Utilities | 5.20B | 0.732 | 53.46 | 36.46 | 49.37 | 45.79 | 3,909 | 49.48 | — |
This peer comparison table provides an overview of Fortis Inc. (FTS) and its competitors** in the Utilities sector. It includes market capitalization, stock volatility (Beta), recent stock performance, and short interest data. Fortis Inc. stands among leading utility providers like Hydro One, Brookfield Infrastructure, and Emera, showcasing its stability and growth potential in the industry.
Final Thoughts
Both Canadian Tire (CTC.A) and Fortis Inc. (FTS) are well-positioned to weather trade tensions and continue delivering strong financial performance. Canadian Tire benefits from domestic retail strength, while Fortis remains a stable defensive play in the utilities sector. Investors seeking resilient Canadian stocks should consider both companies as long-term investment opportunities.