It’s a general thinking among investors, especially those who are new to the investing world, that lower dollar denomination stocks have a long runway for growth, and they could deliver multifold returns over time. While I do not agree to this as stocks quoting low dollar price doesn’t assure great returns, but there are few stocks that are quoting low in terms of price and have exceptional growth potential.
These TSX-listed companies have resilient businesses and strong growth catalysts, which are likely to support the upside in their stock in the coming years.
Kinross Gold
There are multiple vectors that should drive the shares of Kinross Gold (TSX: K)(NYSE: KGC) higher in the coming years. While the favourable industry outlook should support demand, Kinross Gold’s growing production from low-cost mines should continue to boost its earnings, in turn, its stock.
The company projects about a 20% increase in its production in the next three years. Meanwhile, Kinross Gold expects the cost to go down during the same period. High demand, increased production, and lower costs are likely to drive its margins substantially and help the company deliver strong returns over the next several years.
Kinross Gold also looks attractively priced at the current levels. The company’s forward EV-to-EBITDA multiple is well below most of its peers, signifying further room for multiple expansion. With its shares trading near $11, Kinross Gold is a top low dollar denomination stock to own for outsized returns.
Goodfood Market
Goodfood Market (TSX: FOOD) is emerging as a leader in the fast-growing online grocery and meal kits delivery industry. The company’s strong last-mile delivery capabilities and high brand recall are driving its active customer base, in turn, its revenues. Also, its gross merchandise sales are growing at a strong double-digit rate over the past several years, which is encouraging.
Goodfood Market’s robust financial performance has led to a massive rally in its stock. Shares of the grocery delivery company are up about 180% year-to-date. Moreover, it surged nearly 289% in three years.
Despite the stellar run in its stock, Goodfood Market has enough fuel left that could continue to drive its stock higher. The structural shift toward online grocery and rapid adoption rate should help the company to continue to deliver robust financial numbers and support the uptrend in its stock.
Further, the expansion of product offerings and improving cost structure should cushion margins and accelerate its growth.
Enbridge
You may not find Enbridge (TSX: ENB)(NYSE: ENB) attractive with a high degree of uncertainty. However, given the substantial erosion in value, Enbridge stock is among the top low dollar denomination stock to own at the current levels.
As the economic activities rise and we inch closer to a vaccine, Enbridge stock could see a meaningful rebound and deliver strong returns for its investors. Another key benefit of investing in Enbridge stock is its robust dividends.
Enbridge’s annual dividends are growing at a mid-teens rate over the past several years, and the company has been paying dividends since 1953. Currently, the energy infrastructure giant offers a juicy yield of 8.9%, which is likely to boost your overall returns.
