The Bank of Canada Held Rates: Here Are 3 Stocks to Watch

When the Bank of Canada holds rates, investors get a little breathing room, but not a full green light. Borrowing costs still sit high enough to squeeze households and businesses. So the best stocks to watch often have income, essential demand, or exposure to hard assets. These companies don’t need a perfect economy to work, but stability, cash flow, and a reason for investors to pay attention before rate expectations shift again.

MKP

MCAN Mortgage (TSX:MKP) provides residential mortgages, construction loans, commercial mortgages, and investment products. In simple terms, it earns money from lending and mortgage-related investments. Over the last year, MCAN leaned into growth even as housing affordability stayed tough. It also lifted its dividend, which gives income investors another reason to watch the stock while rates stay steady.

Its latest numbers looked strong. In the first quarter of 2026, net interest income rose 8% year over year to $25.6 million. Net income climbed 39% to $23 million, while earnings per share (EPS) came in at $0.57. Book value per share reached $16.12, and total assets under management (AUM) rose 35% to $8.3 billion. The company declared a $0.43 quarterly dividend as well, up 5%. With the stock trading near book value and offering a high yield, MKP fits investors who want income.

AFN

Ag Growth International (TSX:AFN) makes equipment for storing, moving, and processing grain, seed, fertilizer, feed, and food products. That ties it to agriculture, food security, and global grain flows. Those themes don’t disappear just because rates stay high. Over the last year, though, AFN faced a rough patch. It dealt with weaker farm demand, operational problems, and restructuring. That pressure hit the stock and created a value-style setup.

The latest earnings explain both the risk and the opportunity. In the fourth quarter of 2025, revenue rose 4% to $396 million. But adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) fell 38% to $48 million, and the margin dropped to 12.2%. Management responded with a restructuring plan, including a smaller executive team, North American consolidation, and at least $20 million in targeted annual SG&A savings. If margins recover, investors may warm up quickly. Yet if execution keeps slipping, the discount could stick around.

CVE

Cenovus Energy (TSX:CVE) also belongs on the watch list. The Calgary-based oil and gas giant produces oil sands, conventional oil, natural gas, and refined products. It gained even more scale after buying MEG Energy, which strengthened its Christina Lake position. A rate hold can help energy stocks like Cenovus stock if it supports economic demand without crushing activity. Cenovus stock also benefits if oil prices stay firm during global uncertainty.

The latest results gave investors plenty to chew on. In 2025, Cenovus stock reported total revenue of $49.7 billion and net earnings of $3.9 billion, up from $3.1 billion in 2024. Adjusted funds flow reached $8.9 billion, while free funds flow came in at $4 billion. In the fourth quarter, it generated about $2.7 billion in adjusted funds flow and $1.3 billion in free funds flow. Cenovus stock still trades at a modest earnings multiple compared with many large Canadian names at 19 times earnings. Yet debt rose after the MEG deal, so investors need to watch the balance sheet. Still, higher production and strong assets give CVE a clear path.

Bottom line

The Bank of Canada’s hold doesn’t remove every risk. It just gives investors a chance to focus on quality before the next big move. And all three of these stocks offer up income through dividends while waiting on a recovery, even with $7,000 invested.

COMPANYRECENT PRICENUMBER OF SHARESANNUAL DIVIDENDANNUAL TOTAL PAYOUTFREQUENCYTOTAL INVESTMENTAFN$19.71355$0.60$213.00Quarterly$6,997.05MKP$24.97280$1.68$470.40Quarterly$6,991.60CVE$41.38169$0.80$135.20Quarterly$6,993.22

Together, they give investors three very different ways to watch the TSX while rates stay in pause mode.

The post The Bank of Canada Held Rates: Here Are 3 Stocks to Watch appeared first on The Motley Fool Canada.

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More reading

• 3 Canadian Stocks I’d Buy Before the Next Bank of Canada Move
• 3 Canadian Stocks with Over 6% Yield That Haven’t Given Up on Growth
• 3 Canadian Stocks That Billionaire Investors Have Been Accumulating
• 2 Canadian Stocks to Buy Before the Crowd Piles In
• The Energy Stock I’d Most Want to Own for the Next Decade

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends AG Growth International. The Motley Fool has a disclosure policy.