From oil and gas to vegetable farming and memorial services, there’s an interesting mix of industries on display in today’s round-up of high-growth stocks. Below you’ll find a breakdown of the data for three stocks on the TSX index that could come out of 2019 with a high expected growth in earnings.
Village Farms International (TSX:VFF)(NASDAQ: VFF)
A sturdy food stock worthy of a consumer cyclical portfolio in need of some defensive properties, Village Farms International is a potential capital gains play. Up 9.01% in the last 24 hours at the time of writing, this stock is popping, with a share price that’s been trending steadily upwards since the end of 2018.
Though there are a few warnings signs, such as negative one- and five-year average past earnings-growth rates, an above-threshold comparative debt level of 52.5% of net worth, and a high P/B ratio of 6.1 times book, growth investors should take note of a 114.8% expected annual growth in earnings, which is significantly high for a Canadian stock.
Park Lawn (TSX: PLC)
With a focus on funerary and disposal services, this top Canadian stock is a strong contender for a portfolio geared towards a potential recession. Indeed, investors getting into a state of readiness for a 2019 downturn have more than a few reasons to stack shares in Park Lawn from decent per-asset valuation to steady growth.
As sturdy an all-rounder as one is likely to find on the TSX index, Park Lawn has a positive track record (see a one-year past earnings growth of 8.1% and five-year average growth of 20.6%), a healthy balance sheet (indicated by debt of 16.5% of net worth), and market-weight valuation in assets (a P/B of 1.5 times book). Some passive income is on the table, with a dividend yield of 1.81%, while growth investors should be hooked with a 49.5% expected annual growth in earnings.
Parkland Fuel (TSX: PKI)
From Park Lawn to Parkland Fuel, investors looking to get defensive with potentially overlooked stocks have some good options at the moment. Up 6.71% in the last five days at the time of writing, and with an upward trend in its share price since the end of last year, Parkland Fuel had a decent 2018, with a one-year past earnings-growth rate of 150.3% beating its already positive five-year average of 20.9%.
Some might say that Parkland Fuel is a little overvalued at the moment, and judging from a P/E of 25.7 times earnings and P/B of three times book, this may well be the case. However, a moderate dividend yield of 2.93% matched with a 27.5% expected annual growth in earnings may qualify this stock for a long-term investment or inclusion in a TFSA or RRSP.
The bottom line
Investors may want to resurrect their interest in Park Lawn — a stock that could potentially breathe some life into a moribund dividend portfolio. However, its P/E of 69.5 times earnings is a little on the high side. Would-be Parkland Fuel with a low appetite for risk may want to be aware of a debt level of 125.7% of net worth; meanwhile, high-growth investors have an intriguing stock in Village Farms International.
