The Motley Fool

3 Top Stocks to Buy in July

Get price appreciation and income from owning a stake in these top stocks that are ripe for buying right now. These are stocks that could work well for trading within the next 12 months but could work even better as long-term investments in great businesses.

Spin Master

Spin Master (TSX:TOY) is a global children’s entertainment company, which has had over 100 Toy of the Year nominations, including seven nominations in 2019 that led to two awards — PAW Patrol Ultimate Rescue Fire Truck for Vehicle Toy of the Year and Cool Maker KumiKreator for Creative Toy of the Year, following three Toy of the Year wins in 2018. The Toy of the Year awards, which are organized by The Toy Association, are known as the “Oscars” of the toy industry.

Spin Master drives innovation from six internal research and development centres in Toronto, Los Angeles, Hong Kong, Dongguan, Tokyo, and Stockholm, respectively. Additionally, the company sources thousands of ideas from hundreds of third-party global inventors and commercializes 30-50 every year.

Since the initial public offering in 2015, TOY stock has more than doubled in value. The 33% correction from a year ago is the perfect opportunity to buy the quality stock for a good price. At about $38.50 per share, TOY stock has about 25% near-term upside potential according to analysts’ 12-month average target.

quality

Brookfield Property Partners

A markedly different type of top stock from Spin Master, Brookfield Property Partners (TSX:BPY.UN)(NASDAQ:BPY) offers high and stable income generated from a diversified portfolio of global real estate assets.

Brookfield Property offers a yield of about 6.9% that is sustained from cash flow generated from its core portfolio of quality retail and office assets in supply-constrained markets and an opportunistic portfolio that has operational upside.

Specifically, it has about 80% of its balance sheet in the core portfolio and 20% in the opportunistic portfolio. The core portfolio targets total returns of 10-12%, while the opportunistic portfolio targets total returns of about 18-20%.

What’s more to like is that the stock trades at a discount of about 33% from its recent book value, which means other than a safe and high yield, buyers today can expect incredible upside from the stock as well. At US$19.25 per share, BPY stock has about 21% near-term upside potential according to analysts’ 12-month average target.

Bank of Nova Scotia

Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) is a top 10 bank in the Americas by assets and market cap. Specifically, it’s the seventh largest by assets and 10th largest by market cap, which indicates the stock could be undervalued.

Further research shows that it is indeed a tremendous bargain. As the charts show below, Scotiabank increases its book value on a per-share basis in the long run, but the stock is trading at the cheapest price-to-book valuation in over 20 years! So, it makes good sense to back up the truck in BNS stock right now.

BNS Price to Book Value data by YCharts.

As Canada’s third-largest bank, Scotiabank generates about half of its earnings from Canada, which pretty much covers for the dividend. It also has leading positions in higher-growth markets in the Pacific Alliance countries, including ranking the third in market share in Peru and Chile.

The bank’s positioning in international markets has long-term growth prospects. Over the medium term, it aims for earnings per share growth of more than 7%, which makes the stock that’s trading at a price-to-earnings ratio of about 10 a great value play.

Simply put, Scotiabank is a quality business that offers a safe 4.9% yield and trades at a wonderful valuation.

Foolish takeaway

Spin Master, Brookfield Property, and Bank of Nova Scotia are diversified across different industries. So, buying shares of the quality companies at their current undervalued levels should lead to wonderful total returns as a whole over the next five years.

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Fool contributor Kay Ng owns shares of Brookfield Property Partners, Spin Master, and Bank of Nova Scotia. The Motley Fool owns shares of Spin Master. Brookfield Property Partners, Spin Master, and Bank of Nova Scotia are recommendations of Stock Advisor Canada.

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