What are we looking for?
Canadian companies whose revenues are concentrated at home, offering a buffer against trade disruption as the United States-Mexico-Canada Agreement approaches its scheduled review on July 1.
The screen
Cross-border trade has become a key source of uncertainty for Canadian investors. The USMCA, the free-trade pact governing trillions of dollars worth of annual trade across North America, faces its first joint review on July 1, raising the possibility of new tariffs or amended terms that could adversely affect companies that derive substantial revenues from the United States. Canada’s economy contracted for a second consecutive quarter in the first quarter of 2026, partly reflecting trade-related caution from businesses and consumers. Companies that earn the bulk of their revenue at home are less exposed to this overhang.
Using FactSet’s screening tool, I identified Canadian companies that fit this profile by applying the following criteria:
- included in the S&P/TSX composite
- market capitalization greater than $1-billion
- Canadian revenue greater than 70 per cent of total revenue
- U.S. revenue less than 30 per cent of total revenue
- net debt to EBITDA less than three times
- return on equity greater than 10 per cent
- positive forecast one-year sales growth
The six remaining companies were ranked by Canadian revenue as a percentage of total revenue.
What we found
The screen’s top-ranked company, Secure Waste Infrastructure Corp., was excluded because its pending acquisition by GFL Environmental Inc. would convert Secure shares into shares of GFL, a business that generates more than two-thirds of its revenue in the United States.
Toromont Industries Ltd. TIH-T, the exclusive Caterpillar heavy equipment dealer across Eastern and Central Canada, ranked second with 92 per cent of revenue generated domestically, above the group average of 83.8 per cent. The company sells, rents, and services Caterpillar equipment used in construction, mining, and infrastructure projects. First-quarter 2026 revenue rose 13 per cent year-over-year to $1.2-billion, driven by strong demand for new equipment, used equipment, rentals, and product support. Order backlog reached a record $1.7-billion, up 30 per cent from a year ago, indicating sustained demand through the back half of 2026. Toromont also recently raised its dividend for the 37th consecutive year, one of the longest streaks of dividend growth on the TSX, supported by $1.2-billion of cash on hand and minimal debt.
Suncor Energy Inc. SU-T, a Calgary-based integrated oil and gas company, ranked third with 86.5 per cent of revenue generated in Canada through its oil sands production, refining operations, and the Petro-Canada retail network. First-quarter 2026 net earnings reached $2.1-billion, up 24 per cent year-over-year, supported by record upstream production of 875,200 barrels per day and refinery utilization of 97 per cent. Suncor returned more than $1.5-billion to shareholders during the quarter through dividends and buybacks, and after the close of the quarter raised its monthly buyback target by 27 per cent to $350-million, signalling management’s confidence in continued cash generation.
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.