Key Takeaways
- The Bank of Canada held its key interest rate steady, creating uncertainty about future monetary policy.
- Investors should look for companies that can perform well regardless of rate direction—those with strong earnings power, diversified businesses, or exposure to improving mortgage and industrial real‑estate trends.
- Toronto‑Dominion Bank (TD) offers scale, solid capital ratios, and steady earnings that could benefit if rates fall or remain flat.
- MCAN Mortgage Corporation (MCAN) provides direct exposure to Canadian mortgage demand, with growing assets under management and improving credit quality, making it attractive if mortgage activity picks up.
- Nexus Industrial REIT (NXR.UN) delivers industrial‑real‑estate income, high occupancy, and room for rent growth, with expectations of mid‑single‑digit NOI expansion in 2026.
- Together, these three TSX‑listed stocks give a balanced mix of banking stability, mortgage upside, and industrial‑real‑estate growth, positioning them as sensible buys ahead of the Bank of Canada’s next move.
- The Motley Fool Canada’s separate “top 10 TSX stocks for 2026” list does not include MCAN, but the service highlights a strong historical track record for its stock picks.
Context: Bank of Canada’s Rate Decision Sets the Stage
The Bank of Canada recently announced that it would keep its key interest rate unchanged, leaving investors to wonder what the next policy shift might be. In a environment where rates could either stay flat, decline slightly, or eventually rise again, many market participants prefer to own businesses that do not rely on perfect rate conditions to generate returns. Companies with diversified revenue streams, strong balance sheets, or exposure to sectors that benefit from stabilizing or falling borrowing costs are therefore attractive candidates for a pre‑move portfolio.
Toronto‑Dominion Bank (TD): Scale, Strength, and Potential Rate Sensitivity
Toronto‑Dominion Bank remains one of Canada’s largest financial institutions, with extensive operations in Canadian banking, U.S. retail and commercial banking, wealth management, insurance, and capital markets. Over the past year, the bank has focused on execution and rebuilding confidence under new CEO Raymond Chun, while continuing to work through its U.S. anti‑money‑laundering remediation program. In the first quarter of 2026, TD reported net income available to common shareholders of $4 billion, or $2.34 per diluted share, with adjusted diluted EPS of $2.44. Canadian personal and commercial banking delivered record net income of $2 billion, up 12% year‑over‑year, and the CET1 capital ratio stayed robust at 14.5%. Valuation-wise, TD trades at roughly 12 times trailing earnings and carries a market capitalization near $246 billion. If the Bank of Canada later cuts rates, lending activity and sentiment could improve, boosting TD’s earnings. Even if rates stay put, the bank’s scale and earnings power provide a solid foundation for continued gradual growth.
MCAN Mortgage Corporation (MCAN): Direct Mortgage Exposure with Improving Metrics
MCAN Mortgage Corporation is a specialized mortgage investment company that concentrates on residential, construction, and commercial lending, while also holding a strategic stake in MCAP that gives it indirect exposure to Canadian housing finance. Over the last year, MCAN strengthened its leadership team, broadened its product suite, and expanded its uninsured residential mortgage business. Its 2025 results showed net income of $74.9 million, or $1.89 per share, and assets under management (AUM) grew 30% to $7.8 billion. Residential mortgage assets rose 26% to $4.6 billion, and income from MCAP increased 16% to $33.4 million. Although credit losses ticked up, the impaired non‑securitized mortgage ratio improved to 1.7% from 2.5% a year earlier, indicating better asset quality. With a market cap of about $991 million and a trailing P/E ratio around 13.6, MCAN appears reasonably priced. Should mortgage demand rebound as rate pressure eases, the company is positioned to capture meaningful upside from higher lending volumes and improved spreads.
Nexus Industrial REIT (NXR.UN): Industrial Real‑Estate Income with Growth Prospects
Nexus Industrial REIT owns a portfolio of industrial properties across Canada and completed a transition to a pure‑play industrial REIT during 2025. Industrial space has proven to be one of the more resilient segments of commercial real estate, especially compared with older office or mixed‑use assets. Over the past year, Nexus sold legacy assets, added Montreal‑based properties, and brought several new development projects into service. The financial results reflect progress: adjusted funds from operations (FFO) rose to $58.6 million in 2025 from $53.7 million the prior year, while industrial same‑property net operating income (NOI) increased 2.6%. Occupancy remained high at 96%, and the spread between market rents and in‑place rents stayed healthy at 18.7%, leaving ample room for future rental growth. Management forecasts mid‑single‑digit same‑property NOI growth for 2026 and anticipates that the payout ratio will fall below 100% this year. With a market capitalization of roughly $978 million and a trailing P/E near 13.1, Nexus is not priced expensively. In a market awaiting potential rate relief, the combination of steady industrial income, improving fundamentals, and upside from rent escalations makes the REIT an appealing option.
Bottom Line: A Balanced Trio for Uncertain Rate Times
Combining TD, MCAN, and Nexus gives investors a diversified exposure that can weather a range of Bank of Canada outcomes. TD provides the stability and scale of a major bank, with earnings that could benefit from lower rates but remain solid even if rates stay unchanged. MCAN adds direct leverage to Canadian mortgage activity, offering upside if housing demand picks up as borrowing costs ease. Nexus supplies industrial‑real‑estate cash flow, high occupancy, and room for rent growth, delivering income that is relatively insulated from rate swings. Together, these three TSX‑listed securities represent a pragmatic starting point for investors looking to position themselves before the next Bank of Canada policy announcement.
Additional Note: Motley Fool Canada’s Top 10 TSX Picks for 2026
The article concludes with a brief promotion of Motley Fool Canada’s “top 10 TSX stocks for 2026” list, noting that MCAN Mortgage was not among the selected names. The service highlights its historical performance, citing an example where a $1,000 investment in MercadoLibre (first recommended in January 2014) would have grown to over $18,000. It also mentions that Stock Advisor Canada’s average return is 94%, outperforming the S&P/TSX Composite Index’s 85% average. The piece includes the standard disclosure that the contributor holds no positions in the discussed stocks, that The Motley Fool recommends Nexus Industrial REIT, and refers readers to the firm’s disclosure policy. This promotional section is separate from the core investment analysis but underscores the broader context in which the stock ideas are presented.