A top-tier Canadian defense stock
Calian group (TSX:CGY) has been performing below expectations for a few years now. This $650 million market cap company currently trades only with a price-to-earnings ratio of 13.
The good news is that the outlook is turning around. Calian is a major supplier of healthcare, training services and satcom hardware to the Canadian military. It has also become an important supplier to many NATO member states.
With defense spending set to rise over the next five years, Calian should be a big beneficiary. It’s already forecasting double-digit growth by 2026. Based on growth in value, it’s hard to find a better stock in Canada.
A top share in the aerospace industry
Firan Technologies (TSX:FTG) is another small-cap stock that could be a good buy for 2026. This Canadian stock is trading with a price-to-free cash flow ratio of 15.5. While not as cheap as it was this time last year (shares are up 50% in that time), Firan stock is still trading at a significant discount to comparable US aerospace parts suppliers.
Firan supplies printed circuit boards, cockpit components and aftermarket hardware components. The demand for new aircraft is virtually insatiable. The best aircraft OEMs can’t produce them fast enough.
This creates a decade-long tailwind for Firan. Its components are used in a range of commercial and defense aircraft. The company has a strong balance sheet and generates good free cash flows. This Canadian stock is a solid pick for 2026 and beyond.
A leading global engineering stock
WSP worldwide (TSX:WSP) Shares are down 10% over the past six months and down 4% this year. The company is trading near the lowest enterprise value (EV) to earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past five years.
Still, WSP has delivered great results in 2025. Year to date, revenues are up 17% and EBITDA is up 20.4%!
WSP just announced a substantial acquisition that would position it as the largest engineering and consulting firm in the United States. After the synergies are realized, the deal could deliver high single-digit growth. If this Canadian stock can continue to execute on its strong acquisition and organic growth plan, there could still be plenty of upside potential in 2026.
A small-cap Canadian software stock
VitalHub (TSX:VHI) Shares are down 20% this year. Nevertheless, the financial performance has been very good. Year to date, revenues are up 62% and EBITDA is up 43%.
VitalHub supplies crucial software to the healthcare sector. It operates in Canada, the United Kingdom, the Middle East and Australia.
With more than 20 acquisitions under its belt, it has used a software consolidation strategy to grow by region and by service base. It has $123 million in cash on the balance sheet, so there is plenty of opportunity to continue growing through acquisitions.
At first glance, this Canadian stock isn’t cheap. However, with an EV/EBITDA ratio of 13, it is trading at its lowest value in three years. If it can deploy its money wisely, it could see significant growth by 2026 that would support its current value.
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