What are we looking for?<\/p>\n
The S&P\/TSX Composite is heavily concentrated in energy and basic materials, which together account for roughly 30 per cent of the index. With those sectors well covered here in recent months, this week we turn our attention to the broader, often overlooked corners of the Canadian market, where quality businesses with strong fundamentals and conservative balance sheets are quietly doing the work. <\/p>\n
The Screen<\/p>\n
We used Trading Central\u2019s Strategy Builder to screen TSX-listed companies, excluding the energy and basic materials sectors. Our criteria required a minimum TC Quantamental Rating of 55 \u2013 a composite score that evaluates companies across quality, value, income, and momentum factors.<\/p>\n
We also applied a minimum market capitalization of $1-billion, a minimum stock price of $10, and a maximum debt-to-equity ratio of 1.0 to filter for financial discipline, and included each company\u2019s price-to-earnings ratio for valuation context. The screen returned 10 companies spanning retail, industrials, financial services, asset management, consumer staples, and technology.<\/p>\n
More about Trading Central<\/p>\n
Trading Central is a global leader in financial market research and investment analytics for retail online brokers and institutions. Its product suite provides actionable trading ideas based on technical and fundamental research covering stocks, exchange-traded funds, indexes, forex, options, and commodities. Strategy Builder, our stock screener is available through leading retail brokers in Canada and worldwide.<\/p>\n
What we found<\/p>\n
Topping our list is Aritzia Inc. ATZ-T<\/a>, a Vancouver-based women\u2019s fashion retailer that designs and sells clothing and accessories through boutique brands including Wilfred, TNA, and Sunday Best. With a TC Quantamental Rating of 60, supported by strong growth (84) and quality (73) subscores, the company stands out for its robust fundamentals, including an earnings-per-share (EPS) growth rate of 84 per cent and a return on equity of 30 per cent. With a market cap of $17.15-billion and shares up 26.4 per cent year-to-date, Trading Central\u2019s one-year target price is $145. Aritzia is a current holding in the Trading Central Quant Canadian 50 Index ETF TCCA-T<\/a>.<\/p>\n Sun Life Financial Inc. SLF-T<\/a> is one of Canada\u2019s largest diversified insurance and financial services companies. With the largest market cap on our list at $55.14-billion, Sun Life earns a TC Quantamental Rating of 60, driven by very strong growth (81) and solid quality (62) subscores, reflecting EPS growth of 202 per cent last quarter and a return on equity of 14 per cent. The stock trades at a reasonable price-earnings ratio (P\/E) of 16.18 and offers a dividend yield of 3.62 per cent, adding an income component to its quality profile. Shares are up 15.3 per cent year-to-date. TC\u2019s one-year target price is $97.50. Sun Life is also a current holding in the Trading Central Quant Canadian 50 Index ETF.<\/p>\n