- The Problem: Canadian investors frequently suffer from home-country bias, leading them to over-allocate into the oil and gas sector and expose themselves to excessive risk.
- The Solution: Investors can insulate their portfolios from energy shocks by shifting capital towards defensive, asset-light or essential industries that rely on intellectual property or provide critical everyday needs.
- The Opportunities: Canadian small-cap and micro-cap stocks across technology (Haivision Systems), healthcare (NeuPath Health), renewable energy (Cleantek Industries) and consumer staples (Rogers Sugar) offer profitable, diversified alternatives with strong growth tailwinds.
As the US and Israel’s war with Iran stumbles into its fourth month, with both sides holding firm to their ideological superiority, the price of oil remains about 30 per cent higher since initial aggressions, placing a (hopefully temporary) inflationary strain across every industry and household that depends on fossil fuels to get by.
This article is a journalistic opinion piece which has been written based on independent research. It is intended to inform investors and should not be taken as a recommendation or financial advice.
This is an unwelcomed state of affairs if, like many Canadians, you suffer from home-country bias, a tendency shared by investors across the world to overweight their portfolios to their domestic stock markets because of economic stability, the comfort of familiarity and a lack of understanding about the risks of overconcentration.
The comparison is especially lopsided when it comes to the oil and gas sector – our third-largest sector after financials and basic materials – with a study from Vanguard finding that Canadian investors with a home-country bias hold 14.1 per cent more energy stocks than a diversified portfolio would allow, saddling them with the unenviable predicament of taking more risk than they can justify with a commensurate return.
To remedy this situation, Canadian investors should shift their attention from companies where oil and gas are massive, direct inputs, to those participating in defensive, asset-light and technology-driven industries, where products and services either don’t depend on fossil fuels or are so essential to everyday life that companies can pass on increased costs to consumers.
Technology
Keeping our eyes on companies supporting long-term growth with solid income statements and accomplished leadership teams, let’s turn to the technology sector, whose low exposure to oil and gas is directly related to its reliance on intellectual property and server infrastructure, as opposed to vehicle fleets and a steady stream of raw materials to keep supply chains in motion.
Even when an oil and gas shock weighs on the broader market, structural technological tailwinds, such as AI compute capacity, cybersecurity, clean energy and military readiness, are likely to outlast fossil fuel-related inflation because they are what differentiation is made of.
How is Haivision’s video technology aligned with shareholder value?
One company leveraging an asset-light model into a multi-year history of profitability is Haivision Systems, market cap C$174.50 million, a real-time video technology company with a more than 20-year history of providing secure, high-quality, low-latency service to major clients across the world, including Meta, Maersk, NASA, the US Navy, ESPN, CNN and the New York Stock Exchange, backed by a ~75 per cent repeat client rate as of fiscal 2025.
The Emmy-winning company, active in Europe, Asia and the Americas, is growing into a US$10 billion addressable market spanning government and defense, enterprise and media & entertainment, within the overall US$245 billion global video equipment market, which is expected to compound at a steady rate into the next decade thanks to growing demand for digitization and entertainment alike.
Key financial and operational highlights along the company’s growth trajectory to date include:
- Self-funding 16 years of growth with a compound annual growth rate (CAGR) of 22.7 per cent before going public in 2020.
- Transforming an initial C$8.25 million investment into more than C$80 million in annual revenue at the time of IPO.
- Generating 19 consecutive years of positive adjusted EBITDA and counting.
Haivision continued to deliver profitable growth in fiscal 2025, generating C$138 million in revenue, up by 6.3 per cent year-over-year (YoY), supported by adjusted EBITDA of C$12.8 million, down from C$17.3 million YoY, as well as Q4 operating profit of C$3.9 million, up from C$0.2 million YoY, reflecting an active deal pipeline and higher core-product revenue.
At the helm, Miroslav Wicha, Founder, President, Chairman and Chief Executive Officer, has been keeping the ship steady since inception, applying more than 35 years of senior management experience with the likes of Discreet/Autodesk, Alias Research, Silicon Graphics and Hewlett-Packard, with the support of a board and management team highly aligned with shareholders at 33 per cent insider ownership.
Haivision stock (TSX:HAI) last traded at C$6.32 and has added 37.69 per cent year-over-year.
Healthcare
Regardless of how much you need to tighten your belt to fill your gas tank, medical care will surely take precedent, making healthcare one of the most defensive sectors in the industrial complex.
We see this phenomenon in how demand for drugs and medical procedures remains undeterred during energy crises, which can have wide-ranging consequences for healthcare facilities, healthcare workers and patients that rely on specialized equipment at home, resulting in higher morbidity rates and a loss in productivity that require systematic changes to remedy.
How is NeuPath Health leveraging Canada’s public healthcare system for profitable growth?
This dynamic places a premium on companies with a track record of balancing high-quality care with a focus on value-creation, such as NeuPath Health, market cap C$35.39 million, which operates one of Canada’s largest networks of multidisciplinary clinics specializing in chronic pain, musculoskeletal/back pain, sports medicine, as well as numerous other pain-related medical services.
The company’s facilities work primarily within Canada’s publicly funded healthcare system, relieving pressure on over-extended hospitals, with a select number of non-insured procedures on offer to ensure comprehensive treatment options.
NeuPath is equipped to address ~67 per cent and ~38 per cent of Ontario and Alberta’s population, respectively, granting it entrenched market share that has translated into an attractive financial track record. Here’s a breakdown:
- Revenue has grown from C$66.1 million in 2023, to C$72.8 million in 2024, to C$87.2 million in 2025, representing a 15 per cent CAGR.
- Top-line growth has been supported by adjusted EBITDA ascending from C$3.2 million in 2023, to C$3.8 million in 2024, to C$6 million in 2025, respectively, working out to a CAGR of 37 per cent.
- Profitable growth stems from numerous operational improvements including a meaningful reduction in net debt to C$1.7 million in 2025, comfortably covered by C$4.5 million in cash on the company’s balance sheet.
NeuPath showed incremental progress on its path to shareholder value creation in Q1 2026, earning record Q1 revenue of C$21.5 million, up by 11 per cent YoY, and adjusted EBITDA of C$1.5 million, up by 15 per cent YoY, backed by increasing patient visits.
Looking ahead, the company is keen to expand into high-growth markets across Canada and specialties with adjacent or overlapping patient cohorts, including orthopedics, which offer the best chances at enhancing margins and attracting new physicians to its in-house network.
NeuPath’s leadership team, guided by 11 per cent insider ownership, is ideally constructed to deliver on these expansion initiatives, with Chief Executive Officer, Stephen Lemieux, bringing more than 20 years of financial and operations experience in the healthcare and biopharmaceutical sectors, including stints as CFO for the likes of Edesa Biotech, Titan Medical, NeuPath (April 2019 to July 2021), Nuvo Pharmaceuticals, Crescita Therapeutics and Cipher Pharmaceuticals, where he also served as interim CEO.
NeuPath Health stock (TSXV:NPTH) last traded at C$0.63 and has added 125 per cent year-over-year.
Renewable energy
Perhaps the most obvious lane to diversify away from the oil and gas sector is by increasing your exposure to renewable energy stocks, whose underlying companies are deploying technology such as wind, solar, hydro and nuclear, including small modular reactors, capable of keeping us warm and our surroundings well-lit without the burning of fossil fuels.
These energy sources actually benefit when oil and gas prices spike, enticing capital away from the historically volatile sector into what the global scientific community recognizes as the catalysts for our carbon-free future, without which the shared goal of net-zero emissions by 2050 simply wouldn’t be possible.
How does Cleantek turn wastewater and waste gas into a thriving business?
A micro-cap company capitalizing on renewable energy’s multi-trillion-dollar opportunity is Cleantek Industries, market cap C$20.05 million, a technology provider specializing in lighting, wastewater treatment and disposal equipment, whose combination of patented solutions and extensive expertise has led to deals with some of North America’s top exploration and production companies, including Cenovus, Canadian Natural Resources and Occidental Petroleum.
The company’s technology suite, designed to reduce client costs and emissions, is highlighted by:
- DZeroE, which uses exhaust heat from wastewater to generate power for gas processing facilities with zero input costs or fuel consumption.
- EcoSteam & XtremeSteam, which uses waste gas to dehydrate wastewater, lowering clients’ carbon footprints and operating costs.
- Halo & HaloSE, crown-mounted lighting systems that replace multiple conventional lighting units, fostering a growing international market building off of an established North American presence.
Cleantek expects its value-added technology to generate more than 50 per cent revenue growth YoY in fiscal 2026, justified by rising adjusted EBITDA, catalyzed by strong North American demand and a large international HaloSE contract announced in January, with the company keen to follow up two consecutive years of profitable growth in 2024 and 2025.
Concurrently, Cleantek has proved itself to be a responsible steward of capital by cutting net debt/adjusted EBITDA from more than 12x in 2022 to an estimated less than 1x in 2026, which helped to generate net income in Q1, a figure that has been positive since 2024, despite a focus on international expansion and further consolidating North American market share.
The company is in good hands to se its global ambitions through, headed by Riley Taggart, President and Chief Executive Officer, a former COO at VerdeChem Technologies and Vice President and Country Manager at Nine Energy Service, whose transferrable leadership experience is enhanced by a team with deep backgrounds in oil and gas and sustainable investing, including a former CEO of AltaGas and a Co-Founder of PillarFour Capital Partners, a private sustainable investing fund that owns 27 per cent of Cleantek shares.
Cleantek Industries stock (TSXV:CTEK) last traded at C$0.68 and has added 119.35 per cent year-over-year, leveraging by a tight 30.1 million shares outstanding.
Consumer staples
We end with the consumer staples industry, noting how companies that manufacture and sell everyday essentials, including groceries, hygiene products and household goods, benefit from an enduring buffer against oil and gas shocks, in that we will generally be willing to pay more for items tied to our basic wellbeing.
While travel, cars and luxury goods can be done without when times are tough, the food we need for energy and the soap we need to keep ourselves healthy are matters of survival, making their demand destruction virtually non-existent.
Can Canada’s largest sugar company sweeten a diversified portfolio?
A small-cap company actively building value in the consumer staples sector is Rogers Sugar, market cap C$859.38 million, the largest Canadian-owned and operated sugar and natural sweetener company in Canada.
Its diversified product portfolio, marketed under the Lantic and Rogers brands is approximately 50 countries, includes granulated, icing, cube, yellow and brown sugar, liquid sugar, as well as maple syrup and derivative products, making the company a key name to consider to capture rising sugar demand, with the global market expected to grow from US$66.39 billion in 2023 to US$102.32 billion by 2030.
Rogers Sugar is well on its way to garnering greater market share, lifting revenue from C$1.006 billion in 2022 to C$1.31 billion in 2025, with earnings per share soaring from a C$0.16 loss to a C$0.49 gain, respectively, reflecting increasingly efficient conversion on consistent demand.
The company carried on with its money-making ways in Q2 2026, ending March 28, posting an adjusted gross margin of C$54 million, up by 14 per cent YoY, adjusted EBITDA of C$38 million, up by 10 per cent YoY, and adjusted net earnings per share of C$0.14, up by 8 per cent YoY, driven by a disciplined focus on operational execution and customer needs.
Leadership expects the company’s financial performance to remain consistent throughout 2026, with sugar margins and maple sales on track to rise, offsetting lower export volumes stemming from Trump’s tariff regime, though the company’s products are not directly affected, as sugar products fall under The Canada-United States-Mexico Agreement (CUSMA).
Looking ahead, Rogers Sugar is advancing its LEAP eastern expansion project, supported by Investissement Québec, which will add approximately 100,000 metric tons in production capacity by the first half of 2027, laying the foundation for further improvements on the income statement.
Rogers Sugar stock (TSX:RSI) last traded at C$6.72, adding 19.15 per cent year-over-year and 13.71 per cent since 2021.
Takeaway
While demand for oil and gas will remain strong for the better part of this century, making the sector a vital part of any investment portfolio, competition from renewables will rise considerably over the coming decades, as laid out in OPEC’s 2025 World Oil Outlook, making it increasingly important for you to right-size your allocation through proper diversification.
This calls for insulating your investments from oil and gas shocks by favoring companies built around intellectual property and/or critical necessity, whose margins do not depend on uninterrupted physical throughput and, by association, the fuel required to keep supply chains in motion.
Join the discussion: Find out what investors are saying about these oil and gas diversifiers on the Haivision Systems Inc., NeuPath Health Inc., Cleantek Industries Inc. and Rogers Sugar Inc. Bullboards and make sure to explore the rest of Stockhouse’s stock forums and message boards.
