Top 10 Performing Stocks in the Canadian Stock Market 2023

In 2023,  emerged as one of the Canadian stock market's most popular and highest-performing stocks.

$Cameco Corp(CCO.CA)$ experienced a significant surge of 85.9%, attributed to its position as one of the world's largest uranium suppliers, particularly amid the global shift towards greener energy.

The financial sector, including companies like Fairfax Financial Holdings and Great-West Lifeco, contributed to the impressive performance of the Canadian stock market in 2023. The technology industry also yielded substantial returns during the year.

The S&P/TSX Composite index ended 2023 at 20,958.44 points, up 8% from the previous year. It marked the index's first annual gain after declines in 2022. The index was boosted by strong performances from the information technology and healthcare sectors, which rose 57% and 23% respectively in 2023. Energy and financial stocks also contributed to the Composite's yearly growth. On the last trading day of 2023, the index closed 0.14% higher, wrapping up its third straight weekly gain. However, materials and gold stocks weighed on the index on the year's final trading day amid a stronger dollar.

Here are the top 10 performing stocks in the Canadian stock market in 2023.

Please note, high, double and triple- digit returns are highly unusual and there should be no expectations that these can be sustained.

Shopify Inc: SHOP

Sector: Technology

Shopify Inc. offers cloud-based commerce platform products for small to medium-sized enterprises, enabling sales across online, tablet, mobile, social media, and physical stores. Headquartered in Ottawa, Canada, it prioritizes creating a swift e-commerce channel.

Shopify has demonstrated a robust performance throughout the year, registering a substantial increase of 114.40%.

Through recent cost savings, Shopify has now demonstrated the profitability of its core business. Shopify's revenue increased by 25% year-on-year in the third quarter, reaching $1.7 billion. More importantly, the operating profit margin is 7%, in sharp contrast to the significant losses in the same period last year.

Cameco Corp: CCO

Sector: Energy

Cameco Corp, a major uranium producer,  aims to increase production by restarting closed mines and investing in new ones, complementing its uranium conversion and manufacturing facilities.

Cameco, securing the second spot, registered an 85.86% increase.

The uranium and fuel services sector, particularly Cameco, exhibits robust performance, forecasting continued improvement in comprehensive income for 2023. In Q3, net profit reached $148 million, with an adjusted net profit of $137 million, reflecting routine quarterly fluctuations in contract delivery volume. Cameco's strategic decisions and the positive momentum in the nuclear energy industry contribute to its strong financial performance. With these factors in mind, Cameco has revised its 2023 comprehensive income forecast upwards.

Constellation Software Inc: CSU

Sector: Technology

Constellation Software Inc. is a Canada-based company that develops and customizes software for public and private sector markets. The company acquires, manages, and builds specific vertical businesses. Portfolio companies serve various markets, including communications, credit unions, beverage distribution, tour operators, car clubs, textiles and apparel, hotels, and community care. The company operates in Canada, the United States, the UK/Europe, and other regions.

Constellation Software Inc. ranked third with an increase of 54.09%.

Constellation Software Inc.'s stock has surged over 1200% in a decade, reaching a market value of $50 billion, making it Canada's second-largest tech firm after Shopify. RBC notes Constellation spent $8.7 billion on 860+ companies since 2005, with a 25% yearly income growth, potentially surpassing $8 billion in 2023. Constellation has outperformed the tech-heavy NASDAQ index, emphasizing its non-tech-focused success.

Fairfax Financial Holdings Limited: FFH

Sector: Financials

Fairfax Financial Holdings Limited provides reinsurance, property, and casualty insurance in Canada, the United States, and other international markets. The company also owns some non-insurance businesses, such as restaurants. Since its founding in 1985, Fairfax has been led by its Chairman and CEO, Prem Watsa.

Fairfax achieved a 47.41% increase, ranking fourth. It focuses on obtaining robust financing, with approximately $1.2 billion in cash and investments by the end of the third quarter.

Chairman and CEO Prem Watsa anticipates operating income to exceed $3 billion annually for the next three years, with year-to-date earnings including $1.4 billion from interest and dividends, $943 million from underwriting profit, and $500 million from associates and management companies, totaling $1.5 billion-plus.

Great-West Lifeco: GWO

Sector: Financials

Great-West Lifeco is a market leader in life insurance, health insurance, retirement products, asset management, and reinsurance. It dominates group and individual insurance in Canada and operates the second-largest record-keeping business in the U.S. under the Empower brand, contributing around 20% to its revenue. The company extends its offerings to European markets, with a significant presence in the UK, Ireland, and Germany.

Great West Lifeco ranked fifth with a growth rate of 36.77%.

Thanks to recent strategic transactions and operational improvements in the company's business, Lifeco achieved outstanding performance in the third quarter and maintained a strong profit growth trajectory. Basic earnings per share reached a historic high of $1.02, with basic earnings of $950 million, a 17% increase from last year.

Open Text Corp: OTEX

Sector: Technology

Open Text Corp, stemming from a 1980s project at the University of Waterloo, specializes in software for archiving, aggregating, retrieving, and searching unstructured information. Their information management platform serves global enterprises, small businesses, governments, and consumers, offering secure and scalable solutions. Headquartered in Ontario, Canada, Open Text accelerates transformation with intelligent tools and services.

Despite a growth rate of 36.69% and a narrow miss of the top five, OpenText's total revenue for the 2023 fiscal year remains impressive, reaching a record-breaking $4.5 billion, a 28% increase. Of this, 81% (i.e., $3.6 billion) constitutes recurring annual revenue. The company's comprehensive product lineup, effective market strategy, and talented workforce position it favorably for continued growth and profitability.

Brookfield Asset Management Ltd: BAM

Sector: Financials

Brookfield Asset Management provides alternative asset management services through ownership interests in leading global alternative asset management businesses. It offers a range of alternative investment products to investors worldwide, including public and private pension plans, endowments and foundations, sovereign wealth funds, financial institutions, insurance companies, and private wealth investors.

Brookfield Asset Management ranks seventh with a growth rate of 34.12%.

Brookfield Asset Management reported a robust quarter, achieving a total net profit of $122 million. With $61 billion raised in funds since the year's start, including $26 billion in Q3, the company anticipates an excellent year for financing, setting the stage for profitable growth and increased dividends in 2023. Following Brookfield Corporation (BN) 's public listing last year, divesting 25% of its asset management business, the management team expects market rewards as investors witness the execution of growth strategies by asset management businesses.

Alimentation Couche-Tard Inc: ATD

Sector: Consumer Discretionary

Alimentation Couche-Tard operates a diverse convenience store network across North America, Europe, and Canada, offering products like tobacco, groceries, beverages, and services such as car wash. The company's revenue is generated through a variety of retail items and services. Additionally, it manages stores under the Circle K brand in various countries, expanding its global presence.

Alimentation Couche Card ranked eighth with a 25.60% increase.

In the face of persistent inflation and elevated interest rates, Alimentation Couche-Tard's performance remains robust. The company reported a strong second-quarter performance for fiscal year 2024, achieving a net profit of $819.2 million, surpassing the previous year's $810.4 million. Furthermore, with strategic acquisitions of convenience retail and gas stations from 112 companies in the U.S., Couche-Tard continues its rapid expansion in North America and Europe.

Wheaton Precious Metals: WPM

Sector: Materials

Wheaton, a global leader in precious metal streaming, leverages a sustainable value creation model, offering investors exposure to commodity prices with a lower risk profile compared to traditional mining.

Wheaton Precious Metals secured ninth position with a notable 23.25% increase, standing out as the sole representative of the materials industry.

In Q3 2023, Wheaton reported robust performance with $223 million in revenue, up $4 million from the previous quarter, and a notable 16% growth despite a slight sales dip. Strategic partnerships aid mining firms with financial support for discounted metal access. While Wheaton benefits from reselling metals, the company remains susceptible to fluctuations in gold and silver prices, influencing its financial and stock performance over time.

Brookfield Corp: BN

Sector: Diversified

Brookfield Corp specializes in real estate, renewable energy, infrastructure, and private equity investments. With a global asset portfolio, it focuses on commercial real estate, power, and sustainable resources. Revenue is mainly derived from private equity, and the company has significant holdings in the United States and Canada.

Brookfield ranks tenth with a subtle difference of approximately 1% from ninth place, with an increase of 22.64%.

Brookfield offers diversification opportunities for investors, remaining active in 2023 amid a market slowdown. Deploying $55 billion in various global industries, the company also saw substantial monetization, exceeding $30 billion and providing generous returns. The management expects a significant amount of trading activity to occur in 2024.

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FAQ About Canadian Stocks

1. How to Buy Canadian Stocks?

To embark on your investment journey:

1. Assess Finances:

   Evaluate your income, expenses, and recent transactions to responsibly determine your investment budget. Consider a debt plan for balanced financial management.

2. Choose Investment Strategy:

  Decide on active or passive investing. Canadian brokerages offer self-directed or automated accounts. Active investors manage portfolios independently, while passive investors use financial advisors or robo-advisors.

3. Explore Platforms:

  Compare investment platforms based on account options, investment choices, fees, registration, and investor feedback. Ensure the platform aligns with your preferences and goals.

4. Account Setup:

  Sign up for an account by providing necessary details and documentation. Some platforms may have minimum deposit requirements.

5. Select Investments:

  Familiarize yourself with asset classes like stocks, ETFs, mutual funds, bonds, options, futures, forex, and cryptocurrency. Tailor your portfolio to align with your investment objectives.

2. What is the largest Canadian stock market?

The largest stock market in Canada is the Toronto Stock Exchange (TSX). It is the primary equities exchange in the country and one of the largest stock exchanges in the world. The TSX is a key platform for trading Canadian stocks, bonds, and other securities, playing a significant role in the Canadian financial markets.

Source:

1.https://www.cameco.com/invest/financial-information/quarterly-reports/2023/q3

2.https://finance.yahoo.com/news/meet-constellation-software-tech-berkshire-152454823.html

3.https://www.greatwestlifeco.com/news-events/news/great-west-lifeco-reports-third-quarter-2023-results.html

4.https://investors.opentext.com/press-releases/press-releases-details/2023/OpenText-Reports-Fourth-Quarter-and-Fiscal-Year-2023-Financial-Results/default.aspx

5.https://www.wheatonpm.com/news/pressreleases/News-Releases-Details/2023/Wheaton-Precious-Metals-Publishes-2022-Sustainability-Report-Highlighting-Commitment-to-Progress/default.aspx

6.https://www.fool.com/investing/2023/12/16/this-precious-metals-stock-got-rocked-by-silver-pr/