4 Top Canadian Stocks to Buy After Their Impressive Earnings Last Week

Given their impressive performance and healthy growth prospects, these four Canadian stocks could deliver superior returns this year.

The S&P/TSX Composite Index rose 2.2% last month, pushing the index 9.6% higher for this year. The strong February retail sales and expectation of improvement in corporate earnings appear to have increased investors’ confidence, driving the index higher. Amid improved investors’ sentiments, here are the four Canadian stocks that you can buy right now after their impressive earnings.

Shopify

Last week, Shopify (TSX:SHOP)(NYSE:SHOPreported an impressive first-quarter performance, outperforming analysts’ expectations by significant margins. Year over year, the company’s top line and adjusted EPS increased by 110% and 958%, respectively. Its gross merchandise value (GMV) grew 114% to $37.3 billion, with gross payments volume accounting for 46% of it. The impressive performance has led its stock price to rise 1.4% since reporting its first-quarter performance on Wednesday.

The increased adoption of the omnichannel selling model and structural shift to online shopping has created a multi-year growth potential for Shopify. Further, its geographical expansion and innovative product offerings bode well with its growth prospects. With Shopify trading over 23% lower from its February highs, I believe investors should accumulate the stock to earn superior returns.

BCE

Second on my list is BCE (TSX:BCE)(NYSE:BCE), which has also outperformed analysts’ expectations in its recently reported first-quarter earnings. Its revenue and adjusted EBITDA increased by 1.2% and 0.5%, respectively. Meanwhile, the company added 108,468 net new connections during the quarter, generating free cash flows of $940 million. Further, its financial position also looks healthy given its liquidity of $6.5 billion at the end of the quarter.

Meanwhile, the company had made $1 billion of capital investment during the first quarter. These investments could help in increasing its fibre and WHI connections to 6.9 million by the end of this year. Higher demand for its services amid the reopening of the economy, expansion of 5G coverage, and increased digitization could drive its financials in the coming quarters. The company pays quarterly dividends, with its forward yield standing at 5.8%. Given its better-than-expected first-quarter performance, healthy growth prospects, and high dividend yield, I am bullish on BCE.

Waste Connections

After witnessing a tough 2020 due to the pandemic-induced restrictions, Waste Connections (TSX:WCN)(NYSE:WCN) has made a solid start to this year. Its revenue and adjusted EBITDA increased by 3.2% and 6%, respectively. The growth in solid waste volumes and higher recovered commodity values drove the company’s financials during the quarter. Its impressive first-quarter performance boosted the company’s stock price by 1.5%.

Meanwhile, the momentum could continue, given its high-growth potential. The reopening of the economy and improving macroeconomic trends could boost its financials in the coming quarters. The company is also focusing on accretive acquisitions. With its cash and cash equivalents standing at $740 million, Waste Connections is well positioned to complete its future acquisitions. The company pays quarterly dividends, with its forward yield standing at 0.7%.

Restaurant Brands International

My final pick on this list would be Restaurant Brands International (TSX:QSR)(NYSE:QSR), which reported an excellent first-quarter performance on Friday. Its top line came in at $1.26 billion against analysts’ expectations of $1.25 billion, while its adjusted EPS came in at $0.55, beating analysts’ expectations by 10%. Year over year, the company’s revenue increased by 2.9% amid favourable foreign currency translation.

The company’s investments in digital channels are beginning to yield results, as Tim Hortons generated 31% of its revenue in Canada from digital sales. Meanwhile, its adjusted EPS grew 14.6% amid revenue growth and lower operating expenses. Meanwhile, the reopening of the economy amid vaccination expansion could boost the company’s financials in the coming quarters. Further, Popeyes is also planning to open 1,000 restaurants in the U.K., India, Mexico, and Saudi Arabia over the next 10 years. Amid its improving operating metrics and healthy growth prospects, Restaurant Brands International could deliver superior returns this year.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Shopify and Shopify. The Motley Fool recommends RESTAURANT BRANDS INTERNATIONAL INC. Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned.

More on Dividend Stocks

Canadian Dollars bills
Dividend Stocks

3 Monthly-Paying Dividend Stocks to Boost Your Passive Income

Given their healthy cash flows and high yields, these three monthly-paying dividend stocks could boost your passive income.

Read more »

Make a choice, path to success, sign
Dividend Stocks

The TFSA Blueprint to Generate $3,695.48 in Yearly Passive Income

The blueprint to generate yearly passive income in a TFSA is to maximize the contribution limits.

Read more »

hand stacks coins
Dividend Stocks

3 Ultra-High-Yield Dividend Stocks You Can Buy and Hold for a Decade

These three high-yield dividend stocks still have some work to do, but each are in steady areas that are only…

Read more »

senior man and woman stretch their legs on yoga mats outside
Dividend Stocks

TFSA: 2 Canadian Stocks to Buy and Hold Forever

Here are 2 TFSA-worthy Canadian stocks. Which one is a good buy for your TFSA today?

Read more »

calculate and analyze stock
Dividend Stocks

This 5.5% Dividend Stock Pays Cash Every Single Month!

This REIT may offer monthly dividends, but don't forget about the potential returns in the growth industry its involved with.

Read more »

Silver coins fall into a piggy bank.
Dividend Stocks

How to Use Your TFSA to Earn up to $6,000 Per Year in Tax-Free Passive Income

A high return doesn't mean you have to make a high investment -- or a risky one -- especially with…

Read more »

path road success business
Dividend Stocks

2 High-Yield Dividend Stocks to Buy Hand Over Fist and 1 to Avoid

High yields are great and all, but only if returns come with them. And while two of these might, another…

Read more »

Man holds Canadian dollars in differing amounts
Dividend Stocks

This 7% Dividend Stock Pays Cash Every Month

A high dividend yield isn't everything. But when it pays out each month and offers this stability, it's worth considering!

Read more »