3 Mid-Cap Millionaire-Makers for 2020

This trio of mid-cap stocks, including Canada Goose Holdings (TSX:GOOS)(NYSE:GOOS), could provide the risk/reward balance you need.

| More on:
Paper airplanes flying on blue sky with form of growing graph

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.

Rolling right along

Leading off this week is Canadian Tire (TSX:CTC.A), which currently sports a market cap of $9.5 billion. Shares of the retail giant are up about 6% in 2019.

The stock has been sluggish over the past couple of years, but Canadian Tire seems to be carrying plenty of operating momentum into 2020. In the company’s Q3 results on Thursday, earnings per share (EPS) improved to $3.20 on same-store sales growth of 2.7%.

On that strength, management boosted the dividend 9.6% to $4.55 per share.

“Our business is performing well and as one of Canada’s largest eCommerce retailers, having generated more than $500 million in sales in the last 12 months, we are exceptionally well-positioned as we head into our customers’ biggest spending season,” said CEO Stephen Wetmore.

Canadian Tire currently trades at a forward price-to-earnings (P/E) ratio of 11 and offers a dividend yield of 3%.

Cooked goose?

Next up, we have Canada Goose Holdings (TSX:GOOS)(NYSE:GOOS), which has a market cap of about $5.2 billion. Shares of the winter jacket specialist are down 28% over just the past six months.

Concerns over slowing growth, narrowing margins, and declining mall traffic have weighed on the stock in recent months, but Canada Goose might now be too attractive to pass up. Despite missing EPS estimates in Q1, the company still managed to grow revenue 59%.

“Fiscal 2020 is off to a great start with a strong performance in our first quarter, which delivered growth in every geography,” said CEO Dani Reiss. “As we continue to invest in capacity, we are well positioned to capitalize on the strong demand we see across our business.”

With the stock now trading at a forward P/E in the low 20s, betting on that bullishness makes sense.

Attractive assets

Rounding out our list this week is CI Financial (TSX:CI), which currently has a market cap of $4.7 billion. Year to date, shares of the asset manager are up about 27%.

The stock has struggled in recent years on mounting redemptions, but 2020 is shaping up to be a good one for shareholders. In CI’s Q3 results on Thursday, EPS of $0.60 topped estimates by $0.14 even as revenue declined 7% to $527.5 million.

More importantly, management used its still-hefty free cash flow to repurchase $150 million in shares and pay out a dividend of $0.18 per share.

“While we experienced redemptions in the third quarter, we have seen a considerable improvement in our net flows on both a quarter-over-quarter and year-over-year basis,” said CEO Kurt MacAlpine.

CI currently offers a dividend yield of 3.8%.

The bottom line

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

As always, these 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. The Motley Fool owns shares of and recommends Canada Goose Holdings. The Motley Fool owns shares of CI FINANCIAL CORP.

More on Dividend Stocks

consider the options
Dividend Stocks

Is TD Bank the Best Dividend Stock for You?

Toronto-Dominion Bank (TSX:TD) has a high dividend yield but is embroiled in a serious money-laundering scandal.

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Dividend Stocks

How to Use Your TFSA to Earn $6,000 Per Year in Passive Income

Hint: You'll need this Hamilton covered call ETF, which yields over 10%.

Read more »

Growth from coins
Dividend Stocks

2 Dividend-Growth Stocks With TSX-Beating Potential That Deserve More Respect

Here are two of the best TSX dividend-growth stocks you can buy today and hold for the next decade.

Read more »

Man pointing at a recycling symbol
Dividend Stocks

GFL Stock Rose 24% Last Month: Is It Still a Buy in July?

GFL stock (TSX:GFL) exploded by 24% in June, but is the growth now over for July? Or can investors still…

Read more »

A woman shops in a grocery store while pushing a stroller with a child
Dividend Stocks

Better Buy: Loblaw Stock or Metro Stock?

Loblaw (TSX:L) and another grocer that could do well over the long haul as markets get rocky.

Read more »

concept of real estate evaluation
Dividend Stocks

BRE Stock: Should You Buy the 10.5% Yield?

BRE stock (TSX:BRE) offers investors the opportunity for a rebound in a real estate sector that should see high prices…

Read more »

dividends grow over time
Dividend Stocks

Prediction: These Could Be the Best-Performing Value Stocks Through 2030

Seeking value stocks trading at a discount? These top value stocks could outperform through 2030 through valuation expansion.

Read more »

Dividend Stocks

3 TFSA Hacks to Build a $1 Million Tax-Free Nest Egg

These TFSA investing hacks could help convert $95,000 into $1 million tax-free. Here's how to get started.

Read more »