Spring is upon us and it is time for investors to freshen up their portfolios. With that in mind, here are four stocks that would make worthy additions to your portfolio this spring.
A top financial stock
Manulife Financial (TSX:MFC)(NYSE:MFC) has performed quite well in 2019. Year to date, it has gained 29%, more than double the 11.1% gained by the S&P/TSX Financial Index. The outperformance was overdue, as the company was significantly undervalued.
Don’t worry; you didn’t miss out. The company still has plenty of room to run. It is one of the fastest-growing companies in Asia and analysts expect double-digit earnings growth over the next five years.
It is trading at only 7.69 times forward earnings and a cheap P/E-to-growth (PEG) ratio of 0.81. A PEG under one signifies that the company’s share price is not keeping up with expected growth rate and is thus undervalued.
Canada’s best big bank stock
You can’t talk about top picks without including one of Canada’s Big Five banks. My favourite is still Toronto-Dominion Bank (TSX:TD)(NYSE:TD). TD has outperformed its peers over the past 10 years and its 8.58% return in 2019 is, once again, above average.
TD has the best dividend-growth rate among the Big Five and is best positioned to continue to raise its dividend. With a payout ratio of only 49%, it has plenty of room to raise dividends by double digits.
A top retail stock
It is trading well below its 52-week high of $95.58 and at a 25% discount to analysts’ one-year target estimate of $87.91. Canada Goose has done nothing but deliver.
Since going public, it has beat on both the top and bottom lines each quarter. That is eight consecutive quarters of topping analysts’ estimates.
A top defensive stock
As the market rises, the bears have come out in full force, warning against a possible recession. One way to protect yourself is to invest in high-quality defensive stocks. One such stock is Park Lawn (TSX:PLC).
Recently, this funeral home operator announced a stock offering. This sent its stock crashing by almost 10%. However, savvy investors know that this is the perfect time to take a position in the company.
Park Lawn has an impressive growth-through-acquisition strategy. One that is fueled by an industry that is ripe for consolidation. As a small company, it does not have access to unlimited debt and uses share offerings to help fund growth.
Once the market digests its most recent offering and the company puts its cash to use, the stock will rebound.
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 Mat Litalien owns shares of MANULIFE FIN and TORONTO-DOMINION BANK.