3 Top TSX Stocks for the Future

Canadians should target TSX stocks like Park Lawn Corporation (TSX:PLC) that are well positioned for big growth in the coming years.

| More on:
Dad and son having fun outdoor. Healthy living concept

Image source: Getty Images

All the way back in early 2018, I’d discussed why Canadian investors should be looking to take advantage of a huge demographic shift. In 2014, over six million Canadians were aged 65 or older, representing 15.6% of the population. By 2030, the proportion of seniors relative to the broader population is expected to grow to roughly 25%. Canadians should look to target TSX stocks that will experience growth due to this ongoing trend.

This top TSX stock has carved out a dominant foothold in its industry

The death-care industry includes companies that provide death-related goods and services like funerals, burials, cremations, and others. ResearchAndMarkets recently projected that the global death-care services market would grow from $102.3 billion in 2019 to $124.8 billion in 2023. North America is the second-largest region in the world in the death-care services market. Mortality is a tragic reality in our lives, and our aging population means that the demand for quality service in this area will increase.

Park Lawn (TSX:PLC) definitely qualifies as a top TSX stock for the future. The company provides death-care products and services in Canada and the United States. Its shares had dropped 20% in 2020 as of close on June 25. However, the stock was up 13% over the past three months.

The company released its first-quarter 2020 results on May 12. Park Lawn’s stellar balance sheet has allowed it to pursue aggressive acquisitions in this space. In late January, it completed the acquisition of Family Legacy and Harpeth Hills in the Tennessee metropolitan market. Moreover, it announced the construction of a 32,100-square-foot on-site funeral visitation and reception centre in Toronto.

Shares of Park Lawn last had a favourable price-to-book value of 1.2. This company has a fantastic balance sheet and promising growth potential. It is a TSX stock worth stashing for the long term this summer.

This dividend stock can soar on the back of long-term-care demand

This year has been one steeped in tragedy. Governments responded with radical action to the COVID-19 pandemic. Unfortunately, over 8,000 people have died with the virus in Canada so far this year. Over 80% of those deaths occurred in long-term-care facilities. Because of this, the public and private sector has pledged more investment in this crucial area. Extendicare (TSX:EXE) is a top TSX stock worth watching because of this.

Shares of Extendicare have dropped 27% in 2020 as of close on June 25. The stock is up only 3.2% over a three-month span. In the first quarter of 2020, Extendicare saw revenue rise 2.3% year over year to $268.8 million. This was largely driven by long-term-care funding enhancements and COVID-19 funding. Adjusted EBITDA increased $0.3 million year over year to $19.9 million.

Extendicare stock last had a price-to-earnings ratio of 16. This puts it in solid value territory relative to industry peers. Even better, the stock last paid out a monthly dividend of $0.04 per share. This represents a monster 8.1% yield.

One top TSX stock on a roll in 2020

Jamieson Wellness is a sports nutrition and supplement company based in Toronto. These products have soared in popularity over the past few decades, largely on the back of demand from an aging population. The COVID-19 pandemic has put an even bigger focus on personal health. Jamieson reported higher demand in the first quarter because of this development.

Shares of Jamieson have climbed 72% year over year as of close on June 25. I love this TSX stock going forward, but value investors may want to wait for a more attractive entry point this summer.

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 Ambrose O'Callaghan has no position in any of the stocks mentioned.

More on Investing