Chris Blumas Highlights North American Large‑Cap Picks: Stantec, Brookfield Corp, and Alcon

Chris Blumas, Portfolio Manager, Raymond James Investment Counsel

Focus: North American Large Caps

Top Picks: Stantec, Brookfield Corp, Alcon

Financial markets remain surrounded by uncertainty. A conflict in Iran has driven energy prices higher, while expansive AI infrastructure development in the United States has intensified demand for commodities and power, fueling inflation. U.S. inflation has consistently exceeded the Federal Reserve’s 2 % target for more than five years, limiting the Fed’s ability to cut interest rates. Foreign holders currently own roughly one‑third of U.S. Treasury securities. Historically, the nation’s trade deficit has helped finance government debt, but increased onshoring and the return of manufacturing could reduce future demand for Treasuries. Going forward, elevated inflation and waning foreign appetite for U.S. debt may keep rates rising, posing challenges for growth and markets. Nonetheless, investors should balance market concerns with the enduring potential of long‑term compounding, stay invested, and remain focused on prudent company valuations.

TOP PICKS:

Stantec (STN TSX)

Stantec is a leading global design and consulting firm headquartered in Edmonton, Alberta. The company provides a broad range of professional services, including engineering, architecture, environmental consulting, project management, and urban planning. Stantec serves both public and private sector clients across infrastructure, water, transportation, buildings, energy, and environmental markets. The firm is one of the largest engineering and design firms in North America and generates about 75 % of its revenue from this marketplace. Growth has been driven by organic expansion and strategic acquisitions, which have broadened expertise and strengthened its regional presence. In the past year, Stantec’s share price has fallen more than 35 % as concerns about artificial intelligence and service disintermediation have impacted the sector. Looking ahead, AI has the potential to boost efficiency and improve project quality across Stantec’s service offerings. The shares trade at roughly 15 × forward earnings with a trailing free cash flow yield exceeding 6 %.

Brookfield Corp (BN TSX)

Brookfield is a direct investor and third‑party asset manager focused on real assets and private equity. It maintains a controlling interest in each of its publicly traded affiliates and a diversified portfolio of private investments. Brookfield is uniquely positioned to raise large amounts of capital as institutional investors shift toward private markets, and it operates across four listed subsidiaries (BAM, BBUC, BEP, and BIP) while leveraging its platform for counter‑cyclical capital allocation. The firm currently has about $200 billion in group liquidity available for deployment, giving it the flexibility to capitalize on global macro weaknesses. The shares trade around 14 × distributable earnings with a core free cash flow yield above 6 %.

Alcon (ALC NYSE)

Alcon Inc. is a Swiss‑American health‑care company specializing in eye‑care products, with global headquarters in Geneva and primary operations in Fort Worth, Texas. Its business is split roughly evenly between vision‑care (contact lenses and eye drops) and surgical (consumables, implants, and equipment) segments. U.S. revenue growth has been tempered by tariffs this year, yet operating fundamentals—including profit margins, EPS growth, and free‑cash‑flow conversion—are improving. Favorable demographics and rising smartphone use support long‑term demand for Alcon’s products. The shares trade at about 17 × forward earnings with a trailing free cash flow yield exceeding 5.5 %.

Source link