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The Megastars for 2025 Our new Megastar ranking of Canada’s largest publicly traded companies evaluates each major stock on the TSX and awards two star ratings – one for the stock’s appeal to value investors and the other for its allure to momentum investors. We then focused on the 20 stocks with the best blend of value and momentum characteristics, which form our Megastar team. Those marked with an asterisk are returning members from last year’s team. Our full methodology and a list of the ratings for the 250 largest stocks on the TSX can be found here. Air Canada (AC) is the nation’s largest airline and its stock jumped 63 per cent over the past three months. Despite the gains, the company trades at a modest eight times forward 12-month earnings estimates. *CES Energy Solutions (CEU) makes its home in Calgary and provides consumable chemicals to the oil patch. It shot up 189 per cent over the past year, making it the top-performing returning Megastar stock. Despite the jump, the company trades at 12 times earnings and cut its share count by 4.7 per cent over the past four quarters. CIBC (CM) is the largest Megastar this year based on its $90-billion market capitalization, but it is the fifth-largest Canadian bank overall. The Toronto-based institution has a 13 per cent return on equity and trades at 1.67 times book value. It pays a 4.1 per cent dividend yield and recently grew its quarterly dividend-per-share by 7.8 per cent. Cogeco Communications (CCA) is a Canadian telecommunications company based in Montreal that also has operations in 13 U.S. states. It pays a 5.2 per cent dividend yield and reduced its share count by 5 per cent over the past four quarters, which boosts its shareholder yield to 10.2 per cent. Dundee Precious Metals (DPM) is an international gold mining company with operations and projects in Bulgaria, Serbia and Ecuador, and it makes its home in Toronto. The company trades at eight times earnings and six times forward 12-month earnings estimates while paying a modest dividend yield of 1.7 per cent. *E-L Financial (ELF) is an investment and insurance holding company that controls Empire Life Insurance and owns a 35 per cent interest in shipping company Algoma Central (ALC). E-L Financial is based in Toronto and has a pleasing habit of issuing large special dividends every few years. While the company’s stock is thinly traded, it changes hands at 62 per cent of its net equity value, which includes the quarter-end market value of its publicly traded subsidiaries. *Fairfax Financial (FFH) is an insurance-focused conglomerate based in Toronto run by founder and chief executive officer Prem Watsa in a manner similar to Warren Buffett’s Berkshire Hathaway (BRK.A). The company’s shares gained 63 per cent over the past year. But its stock trades at a reasonable 1.37 times book value and nine times forward 12-month earnings estimates. Gildan Activewear (GIL) makes everyday basic apparel that it sells to customers in countries around the world. The Montreal-based company pays a modest 1.7 per cent dividend yield but cut its share count by 9.9 per cent over the past four quarters, which pushes its shareholder yield up to 11.6 per cent. iA Financial (IAG) is an insurance and wealth management company based in Québec City with operations in Canada and the United States. It trades near 11 times forward 12-month earnings estimates, pays a 2.6 per cent dividend yield and cut its share count by 7.6 per cent over the past four quarters to enjoy a shareholder yield of 10.2 per cent. Iamgold (IMG) operates gold mines in Canada and Burkina Faso, West Africa, and is based in Toronto. It recently brought a new mine into production in northeastern Ontario and its stock jumped 179 per cent over the past year. It trades at eight times forward 12-month earnings estimates. IGM Financial (IGM) is a Winnipeg-based wealth and asset manager that had $273.4 billion in assets under management at the end of November. It pays a dividend yield of 4.7 per cent and trades near 10 times earnings. The company is a subsidiary of Power (POW), which is also a member of the Megastar team. *Imperial Oil (IMO) is a large integrated oil and gas company based in Calgary. It pays a 2.3 per cent yield and cut its share count by 7.6 per cent over the past four quarters to increase its shareholder yield to 9.9 per cent. The company is a subsidiary of U.S. oil giant ExxonMobil (XOM), which owns about 69.6 per cent of Imperial’s stock. *Manulife Financial (MFC) provides insurance and wealth management to individuals and institutions primarily in Asia, Canada, and the U.S. The company is headquartered in Toronto, pays a 3.6 per cent dividend yield and trades near 11 times forward 12-month earnings estimates. *Onex (ONEX) is a private equity company based in Toronto that trades at 0.71 times book value. Income investors might grumble about its tiny dividend yield of 0.3 per cent, but the company made up for it by cutting its share count by 5 per cent over the past four quarters. *Power (POW) is a large financial conglomerate based in Montreal that focuses on financial services in North America, Europe and Asia. It owns a 68 per cent stake in Great-West Lifeco (GWO) and 63 per cent of IGM Financial (IGM), which also appear in the Top 250. Power trades near 0.80 times its adjusted net asset value, which includes the quarter-end market value of its publicly traded subsidiaries. *Secure Energy Services (SES) is in the waste management and energy infrastructure business. The Calgary-based company’s stock climbed 97 per cent over the past 12 months and trades at eight times earnings. It also cut its share count by a whopping 18 per cent over the past four quarters. Sun Life Financial (SLF) is a financial services company that provides life and health insurance in Canada, the U.S. and many other markets worldwide. The company makes its home in Toronto and grew its dividend per share by 7.7 per cent over the past year to pay a 3.9 per cent dividend yield. It trades near 11 times forward 12-month earnings estimates. Tamarack Valley Energy (TVE) is a Calgary-based oil and gas exploration and production company with operations in Alberta. The company trades at 7 times earnings, cut its share count by 4 per cent over the past four quarters and pays a dividend yield of 3.4 per cent to achieve a shareholder yield of 7.4 per cent. TC Energy (TRP) is a natural gas pipeline and power company based in Calgary that recently spun off its liquids pipeline business into South Bow (SOBO). It pays a dividend yield of 4.9 per cent and has 24 years of consecutive dividend growth under its belt, adjusting for the South Bow spinoff. Transcontinental (TCL.A) is a printing and packaging company that makes its home in Montreal with operations primarily in the U.S., Canada and Latin America. The company pays a 5.1 per cent dividend yield while trading at 0.77 times book value and for seven times forward 12-month earnings estimates. Main Article: The Globe 250 Spreadsheet: The Top 250 Value and Momentum Star Rankings [.xls] First published in the Globe and Mail, December 20, 2024. |
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