(Part 1/2 of “Top Stocks for July 2019”)
Joey Frenette: Inter Pipeline
My top pick for July is Inter Pipeline (TSX:IPL), a battered midstream player that looks undervalued and ripe for an upside correction as the shares touchdown with technical support levels at around $20.
The main attraction to the stock is the massive dividend yield, which is a whopping 8.55% at the time of writing. Given the medium-term cash-flow-generative projects (like the Heartland Petrochemical Complex) that are slated to complete within the next three years, I’d say Inter Pipeline has the right catalysts, and a means to increase its dividend further.
For long-term thinkers who are content collecting the dividend as they wait for shares to recover, it’s time to pounce on the name today. They’re fundamentally undervalued and technically poised for a bounce.
Fool contributor Joey Frenette has no position in Inter Pipeline.
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Ryan Vanzo: Canada Goose Holdings Inc
For years, shares traded at 50x to 100x trailing earnings. In May, the stock dropped by 30% in a single day, providing a rare buying opportunity for this high-quality stock.
The stock now trades at less than 30 times forward earnings, giving shares the opportunity to rise 100% over the next five years based on earnings growth alone.
Fool contributor Ryan Vanzo has no position in Canada Goose Holdings Inc.
Ambrose O’Callaghan: Enbridge Inc.
Enbridge and other Canadian energy giants have been smacked by volatility over the past several weeks as oil has crept back into a bear market. Investors on the hunt for income should view this as a great buy-low opportunity. The stock had an RSI of 34 as of this writing, which puts it close to technically oversold territory. This makes it a great target ahead of its next earnings report, expected in August.
Enbridge currently offers investors a quarterly dividend of $0.738 per share, which represents an attractive 6.4% yield as of this writing.
Fool contributor Ambrose O’Callaghan has no position in any stocks mentioned.
Demetris Afxentiou: Wheaton Precious Metals
Gold prices have finally reached the all-important US$1400 per ounce level, and that spells massive potential for gold miners. For streamers such as Wheaton Precious Metals (TSX:WPM)(NYSE:WPM), that opportunity is even bigger.
Unlike traditional miners, streamers have the benefit of not needing to worry about the day-to-day operations of a mine after that initial investment. That upfront investment also means that an increase in precious metals prices will directly boost margins when those metals are sold on the market.
In the latest quarter, Wheaton saw gold production surge 22% as new streams came online, which coincided nicely with the steady increase in gold prices. The company also setup streaming agreements for other in-demand metals, such as palladium and cobalt to further diversify its asset portfolio. In total, Wheaton has 19 active mines and a further nine in development.
With market uncertainty mounting and gold prices continuing to rise, Wheaton makes an excellent option for investors looking to diversify.
Fool contributor Demetris Afxentiou has no position in any stocks mentioned.
Stephanie Bedard-Chateauneuf: Dollarama
Dollarama (TSX:DOL), Canada’s largest dollar store chain, is my top stock for July.
After plunging over 35% in 2018, the stock has soared almost 40% year to date. Dollarama is becoming popular again with investors, as the company is back on the growth path.
On June 13, the discount retailer released good quarterly results, which pushed the stock by 11%. Dollarama posted a 5.8% increase in comparable store sales, which is more than twice the gain analysts expected. Sales rose 9.5% to $828 million, above analyst expectation of about $813 million.
The company projects same-store sales will grow between 3% to 4% this fiscal year versus last year, up slightly from a previous forecast.
In my opinion, Dollarama is the best retailer stock to own now.
Fool contributor Stephanie Bedard-Chateauneuf owns shares of Dollarama Inc.
David Jagielski: Bombardier, Inc
Bombardier (TSX:BBD.B) is my stock pick for July. With the company recently announcing that it would be selling its CRJ jet program, it’s made a move that I believe will help convince investors that the stock is worth taking a chance on. Now that Bombardier can focus more on other, more important areas of its business, it can help set itself up for success.
The stock is still trading fairly low and there’s tremendous room for the share price to rise. Despite all its problems, Bombardier has still remained profitable and with a big influx of cash coming its way related to sales of the jet program, its financials will get a whole lot stronger, making it a more attractive investment today.
Fool contributor David Jagielski has no position in Bombardier, Inc.
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.
The Motley Fool owns shares of Enbridge.