Gold, Weed, and Luxury Clothing: 3 Very Canadian Growth Stocks

CannTrust Holdings (TSX:TRST) and two big names in Canadian investing head up the best growth stocks on the TSX index.

| More on:

When it comes to distinct mixes of industries, stock exchanges don’t come much more idiosyncratic than the TSX index – from iconic clothing brands to miners to legal marijuana, a glance at these industries is all it takes to recognize the market.

But are all of these industries worth your investment? Let’s take a look at a representative stock from each sector and see whether they belong in your portfolio.

CannTrust Holdings (TSX:TRST)

This popular pot stock has had a good run of it so far, with a five-year average past earnings growth of 70.6%, which outperforms the Canadian pharma industry average of 46.4% for the same period. Up 7.64% in the last five days, it’s enjoying a 2019 market that’s looking bullish on the green stuff. Other reasons to buy include a 43.2% expected annual growth in earnings and some heady momentum stats.

Though it’s not a dividend payer — as with the other stocks listed here — CannTrust Holdings is a solid buy for two reasons: it carries no debt, and has the potential to reward investors with potential upside. Trading at twice the future cash flow value, and with an oscillating trend in share price, its five-year beta of 2.59 relative to the industry should keep momentum investors interested.

Barrick Gold (TSX:ABX)(NYSE:GOLD)

With a five-year average past earnings growth of 61,4% that outperformed the Canadian metals and mining industry average of 34.3% for the same time frame Barrick Gold is one of the best mining stocks on the TSX index. A 98.4% expected annual growth in earnings puts it squarely on the growth investor’s radar.

Debt 53.8% of net worth crosses the dangerous threshold of 40%, but not by a huge margin. Still, for the casual passive income investor looking to get in on a dividend yield of 1.2%, that kind of balance sheet may up the risk quotient.

With a currently upward trend in share price, this stock has seen some major peaks and troughs since its high two-and-a-half years ago. Having gained 6.83% in the last five days, it’s an insider favourite, with significant volumes of share having changed hands through inside buying over the past year, and at a steady rate.

Canada Goose Holdings (TSX:GOOS)(NYSE:GOOS)

Up 4.64% in the last five days and climbing, but nowhere near recovery from its December nosedive, Canada Goose Holdings is looking at a 33.2% expected annual growth in earnings. Meanwhile, growth is lower and valuation less attractive for Canada Goose Holdings, with a P/E of 73.4 times earnings and P/B of 27.1 times book, thereby signalling that the other two stocks here may be stronger plays.

That said, there may well be more upside left in this iconic clothing brand, and it could pair suitably well with a miner or a pot portfolio.

The bottom line

The value investor may sneer at CannTrust Holdings’ P/E of 53.1 times earnings and P/B of 5.6 times book, but for high growth and the potential to cash in on a swinging share price, it’s one of the best pot stocks on the TSX index. Compare that with Barrick Gold’s lower P/B of 1.7 times book but higher growth, and you have a serious contender in the mining stock.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Victoria Hetherington has no position in any of the stocks mentioned.

More on Stocks for Beginners

woman looks out at horizon
Stocks for Beginners

Here’s How Much Canadians at 35 Need to Retire

If you want to create enough cash on hand to retire, then consider an ETF in one of the safest…

Read more »

Concept of multiple streams of income
Dividend Stocks

Got $10,000? Buy This Dividend Stock for $4,992.40 in Total Passive Income

Want almost $5,000 in annual passive income? Then you need a company bound for even more growth, with a dividend…

Read more »

RRSP Canadian Registered Retirement Savings Plan concept
Dividend Stocks

Watch Out! This is the Maximum Canadians Can Contribute to Their RRSP

We often discuss the maximum TFSA amount, but did you know there's a max for the RRSP as well? Here's…

Read more »

a person looks out a window into a cityscape
Dividend Stocks

1 Marvellous Canadian Dividend Stock Down 11% to Buy and Hold Immediately

Buying up this dividend stock while it's down isn't just a smart move, it could make you even more passive…

Read more »

Blocks conceptualizing the Registered Retirement Savings Plan
Dividend Stocks

CPP at 70: Is it Enough if Invested in an RRSP?

Even if you wait to take out CPP at 70, it's simply not going to cut it during retirement. Which…

Read more »

worry concern
Stocks for Beginners

3 Top Red Flags the CRA Watches for Every Single TFSA Holder

The TFSA is perhaps the best tool for creating extra income. However, don't fall for these CRA traps when investing!

Read more »

Data center woman holding laptop
Dividend Stocks

Buy 5,144 Shares of This Top Dividend Stock for $300/Month in Passive Income

Pick up the right dividend stock, and investors can look forward to high passive income each and every month.

Read more »

protect, safe, trust
Stocks for Beginners

2 Safe Canadian Stocks for Cautious Investors

Without taking unnecessary risks, cautious investors in Canada can still build a resilient portfolio by focusing on safe stocks like…

Read more »