What are we looking for?
Canadian companies with strong historical and forward growth expectations that trade at reasonable valuations.
The screen
Canadian and U.S. equity markets have continued to climb in 2026, with the S&P/TSX Composite Index gaining roughly 6.6 per cent year-to-date and the S&P 500 Index setting fresh record highs. After such a powerful run, valuations have become stretched. Investors increasingly want exposure to companies that are still growing rapidly but trade at multiples that leave room for further upside. A growth-at-a-reasonable-price approach screens for companies with strong momentum that have not been bid up to extreme valuations.
Using FactSet’s screening tool, I identified Canadian companies that satisfy both criteria by applying the following:
- Included in the S&P/TSX Composite
- Market capitalization greater than $1-billion
- Three consecutive years of sales and earnings per share growth
- Estimated one-year sales growth greater than 20 per cent
- Estimated one-year earnings-per-share growth greater than 20 per cent
The 10 companies that passed were ranked by a multifactor composite of price-to-earnings, price-to-sales, price-to-book, and price-to-free-cash-flow ratios.
What we found
Nine of the 10 companies are classified in the non-energy materials sector, predominantly gold miners. The high representation reflects the profits producers have enjoyed as the price of gold has climbed approximately 40 per cent over the past year to near US$4,700 per ounce, fuelled by central bank buying, persistent inflation and the U.S.-Iran conflict. With mining costs rising more slowly than the metal’s price, incremental price gains flow through to profitability, producing the type of growth profile this screen was designed to identify.
Wesdome Gold Mines Ltd. WDO-T, a Canadian gold producer with mines in Ontario and Quebec, ranked first with the lowest price-to-earnings ratio in the group at 9.8 times, well below the group average of 20.3 times. The company reported full-year 2025 revenue of $914-million, up 64 per cent year-over-year, and net income of $349-million, up 2.5 times. Free cash flow reached a record $278-million on production of 185,576 ounces of gold. Wesdome ended the first quarter of 2026 with approximately $430-million in cash, after using $49-million to repurchase 2.1 million shares year-to-date. The company is scheduled to release first-quarter 2026 financial results on May 12.
Celestica Inc. CLS-T, a Toronto-based provider of data centre infrastructure and advanced manufacturing solutions, ranked eighth with a price-to-sales ratio of 2.0 times, and was the only non-mining company on the list. The company reported first-quarter 2026 results on April 27, posting revenue of US$4.05-billion, a 53-per-cent increase year-over-year, and adjusted earnings per share of US$2.16, up from US$1.20. Adjusted operating margins reached 8.0 per cent, a new company milestone. Management raised full-year 2026 guidance to US$19-billion in revenue and US$10.15 in adjusted earnings per share, citing accelerating demand from cloud customers. Celestica also announced a new program to design and manufacture a fibre-optic ethernet switch for an unnamed hyperscaler, which could pave the way for future enterprise computing deals.
The information in this article is not investment advice. The author assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained above.
Arjun Deiva, CFA, is an MBA Candidate at the University of California, Berkeley, Haas School of Business.