Canadian Airline Stocks: What to Buy in 2023?
On the TSX, there are a lot of Canadian airline and aviation companies. Aside from regular passenger airlines, Canada is home to air freight and aviation equipment manufacturers who supply the airlines.
Since the global economy is starting to recover, many investors wonder if these Canadian stocks are worth taking a chance on or if the epidemic has severely harmed them.
Continue reading to learn about the top three best Canadian airline stocks.
Top 3 Airline Stocks
Airline Stocks to Buy
Looking to buy some airline stocks in Canada? We made a list of the top 3. Let’s get right into it!
1. Air Canada
- Founded: January 1, 2001, Ottawa, Canada
- Gross revenue for 2021: around $1.5 billion
Certified as a 4-Star Airline and one of the founding members of the Star Alliance, Air Canada is Canada’s largest airline, with over 200 destinations across six continents.
Every year, Air Canada, along with its partners Air Canada Express and rouge, transports more than 50 million passengers. Its primary hubs are Vancouver International (YVR), Montréal-Pierre Elliot Trudeau (YUL), Calgary International (YYC), and Toronto Pearson (YYZ).
The current price of ACDVF stock is $19.03 as of March 29, 2022, and analysis shows a decline in the past year’s asset price. Because the stock price of Air Canada has been dropping, analysts assume that similar market sectors were not particularly popular during this period.
However, Air Canada is one of the best airline stocks to buy, something that is supported by financial analysts’ forecasts, predicting that the price of ACDVF could go up to 36.45 in the next 12 months.
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2. Cargojet Inc.
- Founded: February 21, 2002, Mississauga, Ontario, Canada
- Gross revenue for 2021: $790 million
Cargojet Inc. runs a domestic air freight co-loading network that connects sixteen major cities in Canada. The company delivers a dedicated aircraft on an aircraft, crew, maintenance, and insurance (ACMI) basis, operating between points in Canada, America, and Europe.
Cargojet Inc. also provides customized charter services for cattle shipments, emergency supplies, military equipment, and other large cargoes throughout America, Europe, Mexico, and the Caribbean.
Over the past two years, some Canadian travel stocks’ prices have been on an upward trend. That has been the case with Cargojet Inc.’s CGJTF, with the current price of $129.58, as of March 30, 2022.
Cargojet Inc. is a reputable company; one of its most significant achievements is the Shipper’s Choice Award for the best Air Cargo Carrier in Canada for the past couple of years. Experts predict that the stock price will increase by about 70% in 12 months, which means that CGJTF will exceed $200; therefore, it will be among Canada’s best airline stock prices.
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3. WestJet/Onex Corporation
- Founded: December 11, 2019, Calgary, Alberta, and Toronto, Canada
- Gross revenue for 2021: $1.7 billion
Founded in 1994 in Calgary, WestJet Airlines schedules services to over 100 destinations all around the globe. The company has received many awards; the most significant are Best Airline in Canada, Canada’s Most Trusted Airline, and North America’s Best Low-Cost Airline.
Established in 1984 in Toronto, Onex invests in its private equity and credit platforms on behalf of its shareholders worldwide. Since 2019 Onex Corp. has been a parent company of WestJet Airlines.
Since there hasn’t been a considerable fluctuation in the stock price and it has been trending upwards for the last couple of years, ONEXF finds its place among the best Canadian travel stocks to buy now.
Additionally, financial analysts predict that in the following year, the stock price will rise to $121.48, which is around 80% higher than the current $67.46.
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Airline Stocks 101
Although airlines are vital to the economy, their stocks haven’t always been profitable investments. However, the value of some airline company stocks has gradually increased during the last year.
How to Invest in Airline Stocks?
The first thing you need to do when investing in airline stocks is to create an account in a multi-asset investment platform, such as Wealthsimple Trade, Questrade and Interactive Brokers. Second, you need to select the product you’d like to start with, fill in your personal information and you can begin trading.
Is Investing in Airline Stocks a Good Idea?
At the beginning of the COVID-19 pandemic, the stock prices of most airlines plummeted and a higher-than-normal level of volatility was also noticed. Furthermore, even if the conflict is resolved promptly, chances for a short-term-post-epidemic recovery are very slim.
Nonetheless, things are looking good for those with a long-term perspective. Despite the losses suffered in recent years, airline companies persisted and given the travel stocks prices’ upward trend, the future looks promising.
Airline Stocks and Volatility
Throughout the years, we have seen that the whole transportation industry is very vulnerable to the effects of system risks provoked by a wide range of external causes beyond control, resulting in unavoidable damages. The COVID-19 pandemic has proven to be such a factor.
In the past few years, the volatility of airline stocks was the highest since 2009. Oil price risk has a strong and widespread negative impact on airline stock prices. Therefore, it is vital for the aviation sector to re-examine its strategic decisions in the post-pandemic world, which would necessitate a more thorough approach to the complex and dynamic network of risk exposures, as well as a rethinking of hedging policies.
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That concludes the top three Canadian airline stocks to buy now. Even though a full recovery from the pandemic might not happen in the next year or two, long-term investors should consider these companies and analyze their performance.
However, when considering investing in Canadian airline stocks, it is crucial to gather data from online searches on specific topics, given how it has a better prediction accuracy.
Even though Air Canada wasn’t profitable in Q4, things are starting to look good: their revenue is up by $2.7 billion (up 30%), operating loss is down by 50% ($500 million, improved from $1 billion), EBITDA is $22 million (improved from -$728 million) and EPS are also improved with -$1.38 instead of Q4’s -$3.91.
Although the company improved its performance since last year, and the pandemic in Canada is waning, it doesn’t necessarily mean that Air Canada stock prices will go up. Still, the current decline in Air Canada stocks could be a terrific opportunity to buy before it increases to at least $25 per share.
The past two years, since the pandemic burst, have been devastating for many airline companies, including Air Canada. The stock prices are trading almost 50% lower than their all-time highs. While it is uncertain what the near future holds for Air Canada, a rise in its stock price is very plausible.