Want to Be a Millionaire? Take the Smart Path With These 3 Mid-Cap Stars

This trio of mid-cap stocks, including Parkland Fuel Corp (TSX:PKI), could provide the risk/reward balance you need.

| More on:
Young adult woman walking up the stairs with sun sport background

Image source: Getty Images

Hi, Fools. I’m back to call your attention to three attractive mid-cap stocks — or, as I like to call them, my top “sweet spot” stocks. As a reminder, I do this because mid-cap companies — those with a market cap of between $2 billion and $10 billion — have two key features:

In other words, if you want to become a millionaire over the next several decades, mid-cap stocks offer a reasonable way to do it.

Let’s get to it.

Walk in the park

Leading things fuel refiner and distributor Parkland Fuel (TSX:PKI), which has a market cap of about $6.3 billion.

Parkland continues to use its unmatched scale (1,855 retail gas stations), hefty cash flows, and strong management team to deliver the goods for shareholders. In the most recent quarter, for instance, distributable cash flow increased by $17 million to $156 million. For dividend seekers, that translates into a highly comforting dividend-payout ratio of 29%.

“The strength of Parkland’s diverse portfolio and integrated assets was on full display in the second quarter, driving outstanding results,” said CEO Bob Espey. “Our International, USA and Supply segments underpinned our performance, and we also benefited from further synergy capture including early wins within Sol.”

Parkland shares are up 21% so far in 2019.

Stan and deliver

With a market cap of $3.3 billion, engineering and construction specialist Stantec (TSX:STN)(NYSE:STN) is the next mid-cap on our list.

Stantec’s leadership position in the design space (top three in North America and top 10 in the world), fiscal discipline, and proven track record are all good reasons to keep an eye on the stock. In 2018, the company posted organic gross revenue growth of 3.3%, adjusted earnings growth of 5%, and ended the year with a backlog of $4.2 billion.

“We are focused on building the engine of the organization that will convert our record-high backlog into revenue while continuing to grow our business,” said CEO Gord Johnston in the most recent quarterly report.

Stantec shares are down about 7% over the past three months.

Renewed energy

Rounding out our list is renewable power company TransAlta Renewables (TSX:RNW), which currently sports a market cap of $3.5 billion.

The shares underperformed significantly in 2018, but 2019 continues to be a strong comeback year for TransAlta. In the most recent quarter, revenue grew 3.7% to $111 million, EBITDA increased 13% to $11 million, and distributable cash improved $6 million to $57 million.

“We are excited to continue this growth plan with the upcoming commissioning of two additional US wind projects later this year and continue to be focused on adding new accretive projects to the fleet,” said President John Kousinioris.

TransAlta shares are up 29% in 2019 and offer a rather juicy dividend yield of 7%.

The bottom line

There you have it, Fools: three attractive mid-cap stocks worth checking out.

As always, they aren’t formal recommendations. View them, instead, as a jumping-off point for further research. Even the best mid-cap stocks can face serious trouble from time to time, so plenty of due diligence is still required.

Fool on.

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 Brian Pacampara owns no position in any of the companies mentioned.   

More on Investing

Investing

2 Great REITs That Won’t Stay Cheap Forever

First Capital REIT (TSX:FCR.UN) and Automotive Properties REIT (TSX:APR.UN) are cheap real estate plays for yield-seeking Canadian investors.

Read more »

shopping online, e-commerce
Tech Stocks

Young Investors: Shopify (TSX:SHOP) Stock May Finally Be Worth Buying

Shopify (TSX:SHOP)(NYSE:SHOP) stock is attempting to stage a bottom, but should investors be buyers amid the market chaos?

Read more »

stock analysis
Investing

3 Ideal Stocks for Your Short-Term TFSA Growth Goals

Depending on what your short-term growth goals are, you can choose from the diverse pool of growth stocks, including linear…

Read more »

Human Hand Placing A Coin On Increasing Coin Stacks In Front Of House
Investing

1 of the Cheapest REITs in Canada Looks Poised to Soar

H&R REIT (TSX:HR.UN) has become way too cheap to ignore for passive-income seekers who want a great deal from the…

Read more »

Early retirement handwritten in a note
Investing

TFSA Investors: 3 Top TSX Stocks to Buy Now for Early Retirement

Plan an early retirement by maximizing your TFSA and investing in solid stocks like CN Rail (TSX:CNR)(NYSE:CNI) for growth.

Read more »

STACKED COINS DEPICTING MONEY GROWTH
Tech Stocks

How to Easily Turn a $25,000 RRSP Into $250,000

You can hold quality growth stocks such as Shopify in your RRSP and benefit from market-beating gains in the long…

Read more »

Retirement plan
Dividend Stocks

3 Retirement Stocks to Buy in Your 20s

A retirement stock is not necessarily something you buy when you retire. It also includes a broad spectrum of stocks…

Read more »

Technology
Dividend Stocks

Dividend Earners: Stay Invested in 2 Low-Volatility Stocks

Dividend earners can stay invested, despite the extreme market volatility provided they shift to two low-volatility stocks.

Read more »