Don’t Wait: These 3 Canadian Stocks Set to Soar With Rate Cuts

Here are three top Canadian stocks worth considering for investors looking to take advantage of incoming rate cuts over the next few years.

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Canadian stocks historically beat the market when the Bank of Canada began to cut interest rates, an event that will probably be repeated soon. Moreover, the gains from real estate, technology, energy, and utility stocks contributed to the lion’s share of Canada’s outperformance during previous periods of earlier Bank of Canada rate cuts. So, here are three Canadian stocks that you must invest in as the interest rate cuts continue.

SmartCentres REIT

SmartCentres REIT (TSX:SRU.UN) is among Canada’s biggest fully integrated real estate investment trusts (REITs). It has a strong portfolio comprising more than 190 strategically located properties in every province of the country. The company owns 35.2 million square feet of income-producing, value-oriented retail space, which has an occupancy of 98.2%.

Created with Highcharts 11.4.3SmartCentres Real Estate Investment Trust PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

SmartCentres REIT’s new projects underway, such as residential and self-storage properties, offer additional growth potential that could contribute to future value and sustained dividend payouts. Moreover, with a price-to-book ratio of 1.25, the stock appears undervalued in its assets, providing a safety cushion for investors seeking to include a high-quality REIT in their portfolios.

Although the payout ratio is on the high side, the diversified portfolio and stable rental income of the trust provide comfort that the dividends are sustainable. Hence, if you seek a high-yielding opportunity with a solid track record and growth prospects, you can consider SmartCentres.

Fortis

Fortis (TSX:FTS) operates and owns 10 utility transmission and distribution assets in Canada and the United States, with nearly 3.4 million customers. It also holds interests in electricity generation with several Caribbean utilities. The consistent revenue stream of that business model allows Fortis to pursue growth initiatives while distributing a generous dividend.

Created with Highcharts 11.4.3Fortis PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Fortis Inc. aims to be one of the leading North American utilities to deliver a cleaner energy future. The regulated utility businesses continued by executing their financial and operational plans in the first half of 2024. On top of that, they are executing their annual US$ 4.8 billion capital plan and are confident in their US$25 billion five-year capital plan.

Fortis is dedicated to delivering shareholder value by rigorously executing its capital plan and maintaining a balanced, robust portfolio of top-tier, long-term, regulated utility businesses.

Alimentation Couche-Tard

Alimentation Couche-Tard (TSX:ATD) operates a network of convenience stores in North America and Europe. The company has been doing exponentially better in terms of business and share price for the last few years. 

Created with Highcharts 11.4.3Alimentation Couche-Tard PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

It is expanding its operations in the United States, Canada, and other regions. Hence, this will help the company to increase its brand value and demand in the market, which will help to earn huge profits. The Circle K operator proposed taking over 7-Eleven owner Seven & i Holdings Co. with a much larger rival. It is one of the biggest takeovers and creates a network of around 100,000 convenience stores.

Through the merger, Alimentation Couche-Tard can become a leading company in the convenience store network, which will help it to amass enormous profits. However, such a merger will attract more investors to add this stock because it provides an ideal opportunity to grow capital. In addition, interest rate reductions tend to make bond-like proxies more appealing, making this company one of the best in this aspect.

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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.

Fool contributor Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alimentation Couche-Tard. The Motley Fool recommends Fortis and SmartCentres Real Estate Investment Trust. The Motley Fool has a disclosure policy.

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