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Stock hunt, sector by sector, turns up dandy dozen

Stocks that made the cut ranged in size from leviathans such as Rogers and CN to smaller companies such as Paladin Labs.

Michelle Siu/The Globe and Mail

What are we looking for?

The best of breed in each sector of the Canadian stock market, based on a combination of fundamental factors and improving outlooks for growth.

More about today's screen

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Craig McGee, senior consultant at Morningstar Canada, prepared today's offering. He scoured the CPMS Canadian equity database to find the best stock in each industrial sector, based on a combination of their estimated returns on equity, their annualized five-year growth rates for earnings, and recent increases to analysts' estimates of their future earnings.

To make the list, a stock had to have a market capitalization of more than $1-billion and each of the yardsticks above had to be greater than the median industry value.

More about Morningstar

Morningstar Inc. provides independent investment research in North America, Europe, Australia, and Asia. Its investment research tool, Morningstar CPMS, provides quantitative North American equity research and portfolio analysis to institutional clients and financial advisors. CPMS data covers more than 95 per cent of the investable North American stock market.

What did we find?

A dandy dozen of stocks, ranging in size from relative pipsqueaks such as Paladin Labs and Poseidon Concepts to leviathans such as Rogers Communications and Canadian National Railways.

While this collection of stocks represents a diversified Canadian equity portfolio, readers should do their own research before buying any of the names listed here.

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Keep in mind that the Canadian stock market is thick with resource and financial service companies, but relatively sparse in areas such as technology and consumer products. Investors who want exposure to these sectors should also look at the U.S. market for candidates.

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About the Author

Ian McGugan is a reporter with The Globe and Mail's Report on Business and has been writing about investing, economics and business for more than 20 years. He joined the Globe and Mail in 2010. He has been executive editor of Canadian Business magazine and founding editor of MoneySense magazine. More

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