The Motley Fool

3 Stocks on My 2020 Christmas Wish List

The year 2020 is just around the corner, and what better time to go shopping for new investments?

With the new year comes many big milestones for investors, not the least of which being the final few months to make your RRSP contributions for the prior year.

In late 2019, we have a stock market that’s hitting all-time highs corresponding with abysmal GDP growth of 0.1%. This party won’t last long, but there are a handful of stocks that are positioned to thrive in a future recession–which WILL happen sooner or later.

With that in mind, here are three stocks on my Christmas Wish List for 2020.

Alimentation Couche-Tard

Alimentation Couche-Tard (TSX:ATD.B) is Canada’s largest convenience store company. It spent most of the 2010s rapidly rebranding Irving gas stations as Circle K stores, which became extremely popular in Canada.

That story is probably familiar to most Canadian readers. What many don’t know is that Alimentation is making huge inroads in the U.S. as well.

According to CSP Daily News–a convenience store industry publication–Circle K has a 6.4% market share in fuels the United States, putting it ahead of the most “famous” U.S. convenience store 7-11 and other market leaders like Speedway. 

Granted, we’re talking about convenience store gas stations here; if we’re talking about gas stations as a whole, its market share drops to 2.1%.

However, this is heady progress that Alimentation is making south of the border, and the company’s earnings are growing at an incredible pace (24.4% in Q2) as a result.

Algonquin Power & Utilities

Algonquin Power & Utilities Corp (TSX:AQN)(NYSE:AQN) is one of Canada’s fastest-growing utility companies, with a huge presence in the United States.

Over the past five years, its shares have massively outpaced both the TSX and the TSX Utilities Sub-Index. In fact, the stock has even outpaced Fortis, a market-beater in its own right.

Why is Algonquin a good buy heading into 2020?

Recall what I said earlier:

We have a stock market hitting all-time highs while at the same time GDP growth is stalling out. This suggests that a bear market could be on the horizon and in these types of situations, utility stocks tend to fare better than other classes of equities.

Canadian Pacific Railway

Canadian Pacific Railway Ltd (TSX:CP)(NYSE:CP) is Canada’s second-largest railway after the behemoth CN Rail, and a massive player in the Canadian transportation industry.

CP’s earnings history is much more volatile than CNs, with many dramatic upswings and downswings. However, in good quarters, it can grow by extremely impressive amounts.

Since 2001, we’ve seen Canadian Pacific massively outperform CN, although the former has given investors a more volatile ride along the way.

Right now, railways are seeing slowing revenue thanks to a softening of the economy. Accordingly, there may be a good buying opportunity for CP in the not-too-distant future, after which it will recover as the economy slowly but surely regains its footing.

5 TSX Stocks for Building Wealth After 50

BRAND NEW! For a limited time, The Motley Fool Canada is giving away an urgent new investment report outlining our 5 favourite stocks for investors over 50.

So if you’re looking to get your finances on track and you’re in or near retirement – we’ve got you covered!

You’re invited. Simply click the link below to discover all 5 shares we’re expressly recommending for INVESTORS 50 and OVER. To scoop up your FREE copy, simply click the link below right now. But you will want to hurry – this free report is available for a brief time only.

Click Here For Your Free Report!

Fool contributor Andrew Button owns shares of Canadian National Railway. David Gardner owns shares of Canadian National Railway. The Motley Fool owns shares of and recommends Canadian National Railway. The Motley Fool recommends ALIMENTATION COUCHE-TARD INC and Canadian National Railway. Alimentation Couche-Tard is a recommendation of Stock Advisor Canada.

I consent to receiving information from The Motley Fool via email, direct mail, and occasional special offer phone calls. I understand I can unsubscribe from these updates at any time. Please read the Privacy Statement and Terms of Service for more information.