You don’t need tonnes of cash to create wealth. A small and consistent investment in good growth companies can go a long way. So, if you’re looking to invest in stocks with solid growth potential and trading at a smaller dollar amount, buy into these three top TSX stocks trading under $50.
Absolute Software
Absolute Software (TSX:ABT) stock is on a tear and has increased nearly 99% in one year. Besides, its stock has surged over 77% year to date. The stellar bull run in its stock is due to the growing demand for its products and solutions.
The company’s endpoint security software and services are witnessing a surge in demand, thanks to a sizeable shift in the number of people working and learnings remotely. Absolute Software’s annual contract value base has risen consistently over the past several quarters.
Meanwhile, the company’s high recurring revenue stream is comforting. Lower competitive activity and a debt-free balance sheet provide a strong underpinning for future growth.
The stock trades cheap when compared to the industry average and offers a decent forward yield of 2.1%. Rising demand, organic and inorganic growth opportunities, and expansion of product suite should continue to support the rally in Absolute Software stock.
Lightspeed POS
Shares of Lightspeed POS (TSX: LSPD) have surged significantly from its March lows. However, it is still trading in the red on a year-to-date basis. Similar to Shopify, Lightspeed helps SMBs in transitioning online and supports their e-commerce, payments, and supply chain.
The coronavirus pandemic has led to an increased number of businesses moving online to meet the customers’ demands, providing a strong growth opportunity for Lightspeed. The company is witnessing a spike in demand for its digital products and platform, which should drive its stock higher and expand its market share in the coming years.
Its streamlined e-commerce onboarding, innovation, and expansion of product suite provide a strong base for future growth. Moreover, its stock is available at less than one-fourth of Shopify’s valuation at the current levels, which makes it an attractive buy.
AltaGas
If you’ve been following my articles on AltaGas (TSX: ALA), you probably know that the company has crossed an inflection point and its stock is ready to soar high. AltaGas provides a unique combination of growth and income.
The company generates the majority of its revenues from the regulated utility business, which generates stable cash flows and supports its payouts. Meanwhile, its midstream operations offer high growth and are likely to be a key catalyst for the company in the long run.
AltaGas offers a juicy forward yield of 5.9%, which is very safe. Its utility rate base is expected to increase by 8-10% annually in the foreseeable future, implying that investors can expect its dividends to continue to grow in the coming years.
Meanwhile, its midstream operations got a significant boost from the addition of RIPET (Ridley Island Propane Export Terminal). RIPET is witnessing strong volumes with a high utilization rate, driving the segment’s revenues at a brisk pace. The company’s strong fundamentals and attractive yield make it a solid long-term investment option under $50.
