The TSX entered the ultimate stretch of July close to a file excessive. That feels like an odd invitation to purchase shares, but an costly market can nonetheless include particular person corporations buying and selling properly beneath their highs. The index could also be partying. Not each visitor acquired the memo.
August traders shouldn’t try to predict what the whole market will do subsequent. A calendar month isn’t an funding thesis, and shares don’t change into extra cooperative just because somebody packed sunscreen.
The Financial institution of Canada not too long ago held its coverage price at 2.25%, noting that Canadian progress is bettering whereas inflation ought to progressively ease. Commerce uncertainty and geopolitical dangers stay, nevertheless, making diversification notably helpful.
A smart August watchlist can due to this fact mix stability, earnings, progress, and highly effective long-term traits. Buyers shopping for shares in Canada ought to nonetheless construct positions progressively and maintain sufficient corporations or ETFs to outlive when one sensible thought behaves moderately much less brilliantly. That stated, these are the highest choices I’d take into account on the TSX right this moment.
Supply: Getty Photographs
RY
Royal Financial institution of Canada (TSX:RY) gives the monetary basis. RBC inventory earned $5.5 billion in its second quarter, whereas its 13.5% CET1 capital ratio gives safety in opposition to mortgage losses. Administration additionally raised the quarterly dividend 7% and introduced plans to repurchase as much as 45 million shares.
At roughly 18.9 occasions trailing earnings, RBC inventory isn’t low-cost, whereas a recession may improve provisions. But its scale, wealth-management enterprise, and HSBC Canada acquisition nonetheless supply a number of routes to future progress.
FTS
Fortis (TSX:FTS) provides significantly much less pleasure, however that may be stunning. Its regulated electrical and fuel utilities serve 3.5 million clients. A $28.8 billion capital plan ought to develop the speed base by roughly 7% yearly by 2030, supporting administration’s 4% to six% dividend-growth goal.
The shares commerce close to 23 occasions anticipated 2026 earnings and yield roughly 3.1%. For traders, debt, rates of interest, and regulatory choices stay the primary dangers.
SHOP
Shopify (TSX:SHOP) provides the expansion. Its platform helps retailers construct shops, course of funds, handle stock, and promote by social media and artificial-intelligence (AI) channels. First-quarter income jumped 34%, whereas free money stream reached US$476 million.
Shopify inventory additionally expanded its share-repurchase authorization to US$5 billion after the inventory fell greater than 27% throughout 2026. The valuation stays demanding, and competing AI procuring instruments may threaten its benefit. That threat has additionally created the chance.
CCO
Cameco (TSX:CCO) gives publicity to nuclear energy as electrical energy demand rises from information centres, manufacturing, and grid electrification. Its uranium mines provide reactor gas, whereas Westinghouse gives nuclear know-how and providers. Cameco inventory’s share of Westinghouse’s first-quarter adjusted earnings earlier than curiosity, taxes, depreciation and amortization (EBITDA) climbed 33% to $122 million.
Cameco inventory has fallen roughly 25% over three months, though it stays costly after a spectacular five-year run. Uranium costs, manufacturing issues, and mission delays can all create sharp swings.
TOU
Tourmaline Oil (TSX:TOU) completes the record with pure fuel and dividends. Canada’s largest fuel producer generated $202 million in first-quarter free money stream and ended March with web debt equal to solely 0.4 occasions money stream. Administration forecasts roughly $900 million in free money stream for each 2026 and 2027 as LNG-linked pricing expands.
The $2 annual base dividend yields roughly 3.1%, with particular funds providing attainable bonus earnings. But weak fuel costs stay the plain troublemaker.
Backside line
Previous efficiency doesn’t present a crystal ball, though it could provide a helpful calculator. The next illustration applies every inventory’s share-price compound annual progress price (CAGR) from the final 4 years.
| COMPANY | RECENT PRICE | SHARES | ACTUAL INVESTMENT | 4-YEAR PRICE CAGR | PROJECTED 1-YEAR PRICE | ANNUAL DIVIDENDS | PROJECTED PRICE GAIN/LOSS | PROJECTED TOTAL GAIN | PROJECTED TOTAL RETURN |
|---|---|---|---|---|---|---|---|---|---|
| RY | $297.95 | 16 | $4,767.20 | 24.6% | $371.24 | $112.64 | $1,172.67 | $1,285.31 | 27.0% |
| FTS | $82.14 | 60 | $4,928.40 | 8.1% | $88.81 | $153.60 | $400.36 | $553.96 | 11.2% |
| SHOP | $166.88 | 29 | $4,839.52 | 36.4% | $227.59 | $0 | $1,760.60 | $1,760.60 | 36.4% |
| CCO | $127.31 | 39 | $4,965.09 | 44.7% | $184.17 | $9.36 | $2,217.51 | $2,226.87 | 44.9% |
| TOU | $64.78 | 77 | $4,988.06 | -1.5% | $63.82 | $154.00 | -$73.98 | $80.02 | 1.6% |
| TOTAL | — | 221 | $24,488.27 | — | — | $429.60 | $5,477.15 | $5,906.75 | 24.1% |
A selected beginning date can clearly change a projection dramatically. Buyers with enough room may maintain them inside a Tax-Free Financial savings Account (TFSA), permitting the dividends and potential good points to compound tax-free. August could solely present the beginning date. The actual alternative wants years to do its greatest work.
