Neha Chamaria: Canadian National Railway Company
Canadian National Railway Company (TSX:CNR)(NYSE:CNI) shares have dropped nearly 9% in the past three months, wiping out all of their gains for 2018 as of this writing. As sad as that might sound, value investors have a top opportunity here for 2019.
Canadian National is on a roll, having delivered solid third-quarterly numbers on the back of robust commodity markets. The company fast-tracked major expansion ahead of a busy season and is on track to put as many as 27 new projects into service in fiscal 2018.
In coming weeks, Canadian National is expected to report adjusted earnings of $5.30-$5.40 per share for FY 2018, representing good 8% growth at the midpoint over 2017. It also continues to be the most cost-efficient railroad in the U.S. That should get any value investor excited given that Canadian National is currently trading close to multi-year low P/E of 13 times.
Fool contributor Neha Chamaria has no position in this company.
David Jagielski: Toronto-Dominion Bank
Toronto-Dominion Bank (TSX:TD)(NYSE:TD) is my stock pick for January. TD has underperformed this year, as have other bank stocks, and the softer start for 2019 means it’ll have the potential to produce significant returns for investors.
TD continued to show strong growth in its latest quarter, and with interest rates looking like they might continue to increase next year, those numbers may only get more impressive in future quarters.
It’s easy to justify investing in TD on a normal day, and when the stock is down it becomes an even better buy. Add its strong dividend into the mix, and you could be looking at double-digit returns for 2019.
Fool contributor David Jagielski has no position in Toronto-Dominion Bank
Stephanie Bedard-Chateauneuf: Alimentation Couche-Tard Inc.
Alimentation Couche-Tard (TSX:ATD.B), one of the world’s biggest convenience store players, is my top stock for January.
Couche-Tard’s Q2 earnings rose 9% to US$473 million, driven by acquisitions and fuel sales. Adjusted profit increased 5% to US$0.84 a share for the quarter, beating analysts estimate of US$0.82 per share.
Revenues jumped 21% to US$14.7 billion in the latest quarter. Same-store merchandise revenues rose by 5.1% in Canada, 4.4% in the United States, and 4.6% in Europe. Couche-Tard expects to open 200 new convenience stores annually over the next few years.
Couche-Tard is a defensive stock that offers good growth prospects, so it is an interesting choice in a period of uncertainty like the one we are in. The stock has finally got out of the long tunnel it was stuck in since 2015.
Fool contributor Stephanie Bedard-Chateauneuf owns shares of Alimentation Couche-Tard Inc.
Andrew Button: Canadian Pacific Railway Ltd
The economic conditions favouring Canadian Pacific are simple: the need to ship goods is not going away any time soon, and trains are a far cheaper shipping option than cars or trucks. This ensures steady business for this company for the foreseeable future. This fact is amply demonstrated by the railway’s phenomenal growth. In Q3 2018, revenue was up 19% and diluted earnings were up 24%, while the company’s adjusted (non-GAAP) earnings were up a full 42%.
Finally, Canadian Pacific shares are pretty cheap right now, trading at just 14.8 times earnings.
Fool Contributor Andrew Button does not own shares in Canadian Pacific Railway Ltd.
Amy Legate-Wolfe: Cameco Corp
It’s been a long road to recovery for the uranium industry, but 2019 should see a fresh start. At the head of that charge should be Cameco (TSX:CCO)(NYSE:CCJ), the word’s largest publicly traded uranium producer.
While shares still on the low end compared to the highs once seen prior to the 2011 Fukushima disaster, growth in the last few quarters has investors excited. With 55 new reactors around the world under construction, and 60 in planning phases, there’s a lot of opportunity for this producer.
The stock also has a nice little dividend of $0.08 per share while you wait. But don’t wait too long because shares definitely are growing, strong and steady in this drastically undervalued stock.
Fool contributor Amy Legate-Wolfe does not own shares of Cameco Corp.
Kay Ng: Brookfield Property Partners LP.
In anticipation of higher interest rates, many high-yield real estate investment trusts have been sold off and has fallen off a cliff in the last month or so. If there’s one real estate company that will maintain its big dividend, it’d be Brookfield Property Partners (TSX:BPY.UN)(NASDAQ:BPY).
As of writing, it offers a yield of close to 8%, which is the highest it has offered since it was spun off from Brookfield Asset Management.
Although the stock looks super undervalued, investors should look for some support from the stock before buying shares to avoid catching a falling knife. Moreover, expect the turnaround story to play itself out over multiple years. In the meantime, enjoy the growing cash distribution.
Fool contributor Kay Ng owns shares of Brookfield Property and Brookfield Asset Management.
Andrew Walker: Toronto-Dominion Bank
The company’s energy loans represent less than 1% of the total loan book, and the loan-to-value ratio on the uninsured component of the mortgage portfolio is low enough that things would have to get pretty bad in the housing market before the bank takes a material hit.
The American operations provide a nice balance to the revenue stream and now generate about a third of the company’s profits.
TD appears oversold after the recent pullback. Dividend growth should continue at a steady pace and investors who buy now can pick up a 3.9% yield.
Fool contributor Andrew Walker has no position in Toronto-Dominion Bank.
Jason Phillips: Maxar Technologies Ltd
Maxar’s shares have fallen 80% since the start of 2018 and while there may not be much of a chance this stock will be getting back to its 52-week highs in 2019, it’s still a company that has a lot going for it heading in to the new year.
One is the share’s 9.01% annual dividend yield, backed by a 57% payout ratio.
A second is the ongoing transformation to reposition the company as a U.S. domiciled entity in order to bid for U.S. defense contracts.
A third potential catalyst meanwhile, would be those looking to re-enter their positions in the MAXR shares after having locked in their capital losses for 2018 tax reporting purposes.
Fool contributor Jason Phillips has no position in shares of Maxar Technologies Ltd.
Ambrose O’Callaghan: Barrick Gold Corp.
My top stock for January is Barrick Gold (TSX:ABX)(NYSE:ABX). Barrick is the world’s largest gold producer, with mines operating in North and South America, as well as Australia and Africa. Shares have surged since mid-September on the back of rising gold prices and economic uncertainty.
Economies and markets in the developed world are facing major headwinds in 2019, and gold equities are positioned to be a potential beneficiary of increased turbulence. Central banks have also hinted at pausing rate tightening in 2019, which will boost the spot price of the yellow metal going forward.
Gold producers like Barrick will realize huge revenue increases if the spot price of gold carries its momentum into the new year.
Fool contributor Ambrose O’Callaghan has no position in any stocks mentioned.
Demetris Afxentiou: Canadian Tire
If there is one area of the market that investors should pay attention over the holidays, it would be retail, and Canadian Tire (TSX:CTC.A) is one retailer that I’ve had my eye on for some time now.
Over the course of the past few years, Canadian Tire has acquired several very strong brands, ranging from Sport Chek and National Sports to the most recent addition, Norway-based Helly Hansen, and the strategic significance, not to mention the opportunity of those deals cannot be understated.
On the one hand Canadian Tire is building an enviable portfolio of brands to counter the emerging e-commerce threat, and on the other the recent Helly Hansen deal added an impressive and successful wholesale and retail distribution system that serves 40 countries. Coincidentally, Canadian Tire has struggled with expanding outside of Canada in the past.
Finally, there’s Canadian Tire’s increasingly popular dividend. The impressive yield is currently just shy of 3%, which is incredible considering it was a paltry offering just several years ago.
Fool contributor Demetris Afxentiou has no position in any stocks mentioned.
Mat Litalien: goeasy Ltd
Looking back on 2018, it was a volatile year. In some cases, stocks were dragged down by macro events irrespective of fundamentals. One of those is financial services company goeasy (TSX:GSY).
Goeasy dropped 30% last quarter despite posting record results. It is well positioned for growth and is trading at ridiculously cheap valuations. At a forward P/E below nine and a P/E to growth (PEG) ratio of 0.26, goeasy is my top pick for the month.
Fool contributor Mat Litalien is long goeasy Ltd.
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David Gardner owns shares of Canadian National Railway. The Motley Fool owns shares of Canadian National Railway.