The vast majority of top-performing stocks on the Toronto Stock Exchange (TSX) are participants in Canada’s energy transition, according to the exchange’s top executive, who also noted investors are now favouring value over growth.
On Tuesday, the Toronto Stock Exchange released a ranking of its highest performers based on dividend-adjusted share price performance over a period of three years, named the TSX30.
According to a press release Tuesday, the TSX30 represents over $380 billion in market capitalization, adding around $210 billion over the past three years.
The 2024 iteration of the list is “dominated by three sectors,” those being oil and gas, industrial products and services, and mining, the press release said, highlighting that companies in those sectors account for 25 of the 30 companies listed.
“I think there’s a few themes here…there’s a real focus on mining, industrials, and oil and gas and I think there’s an interconnectivity across all three of those sectors,” Loui Anastasopoulos, CEO of the Toronto Stock Exchange, said in an interview with BNN Bloomberg Tuesday.
“And you see it, whether it’s Hammond Power powering infrastructure for oil and gas, or Celestica, a technology company that is providing grid stabilization for EV infrastructure, or Cameco, the largest uranium producer in the world.”
Anastasopoulos said those companies are “all working towards powering Canada’s energy transition, and powering (the) Canadian economy.”
Ontario-based Hammond Power Solutions Inc. was ranked first on the list, followed by Toronto-based Celestica Inc.
“These are all great Canadian companies; homegrown. We have one international company on the list. But again, it really does showcase that Canada can grow great Canadian companies,” Anastasopoulos said.
“These are blue chip companies paying great dividends that have provided great returns for investors and have created a lot of wealth for investors as well.”
According to Anastasopoulos, the list also showcases the “critical role” Canada is playing in global energy security at a time of political uncertainty around the world.
This year’s TSX30 also indicates investors are shifting their focus from growth investing to value investing, prioritizing companies with positive cash flow and a history of dividends, the release said.
“We’re seeing a shift from investors moving from growth to value investing, really looking for profitable growth and looking for companies (that are) stable and historical dividend payers,” Anastasopoulos said.
According to the press release, 63 per cent of the 30 companies on the list paid dividends, with an average yield of 2.8 per cent. This was found to be significantly higher than a previous version of the list in 2021, which had only eight dividend-paying companies.
With files from the Canadian Press.