Welcome to ‘Stock Teasers’, where we aim to provide investment research on a wide range of topics. In this edition, Cross-Border Stocks, we spotlight one Canadian stock and one US stock, regardless of sector or size. Let’s dive in!

Canadian Stock: Agnico Eagle Mines Limited (AEM)

Agnico Eagle Mines (AEM) is a major gold mining company in Canada, known for its extended history of gold exploration, development, and production. It has a diversified portfolio of mines mostly in North America with a few projects across Europe. AEM has been somewhat acquisitive over the years, with the acquisition of Kirkland Lake Gold in 2022. The name offers operational stability since most of its operations are in Canada, the US, and Finland, which are miner-friendly regions. 

AEM has been one of the most solid performers in the Canadian materials space, with a 10-year total return CAGR of 14.8%. In terms of its financials, it pays a 1.9% dividend yield, has a strong track record of sales and earnings estimates, and analyst estimates have been rising over the past year. The company is highly dependent on the price of gold, but with the underlying price of gold rising to new highs over the past several months, we feel AEM has some solid tailwinds. It is a large gold miner ($55 billion market cap) and both EBITDA and sales have grown nicely over the years (37% and 28% five-year CAGRs, respectively). 

Its valuation has compressed over the years, reaching a forward P/E multiple of 18X today. Given the expected growth in sales and earnings over the next year (29% and 78%, respectively), we like the prospects of AEM today, particularly with a rising spot price of gold. 

US Stock: Intuitive Surgical (ISRG)

Intuitive Surgical (ISRG) is an industry leader in the robotic-assisted surgery industry, well-regarded for its da Vinci surgical system. Its technology allows surgeons to perform complex procedures with enhanced precision, control, and visualization, which greatly helps with the recovery time for patients. Its da Vinci system is the most widely used robotic-assisted surgical platform in the world. Its sales are from a mix of da Vinci systems, ongoing sales of instruments and parts, and maintenance fees of the systems. 

ISRG has a strong track record of performance, with a 10-year total return CAGR of 25.0%. In terms of its financials, it is a large-cap healthcare name ($170.0 billion market cap), and it has grown its sales and earnings at a five-year CAGR of 13.4% and 11.6%, respectively. Forward analyst estimates call for a 13.7% next year sales growth rate and 16.6% earnings growth rate. Analyst estimates have been rising over the past few months, as optimism around its industry-leading healthcare robotics position continues, and it makes progress on the AI front. 

While its share price has risen dramatically since the peak of 20221, its valuation has stayed roughly the same or declined slightly. This suggests its fundamentals are improving and that we could see its valuation compress more in the future if earnings continue to grow and its share price grows at a slightly lower rate. It is not cheap at a 68X forward earnings multiple, but we feel this is the price for a high-growth, industry-leading name in the robotics-assisted surgery industry.

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