Over the past few weeks, we have started to get news on the effectiveness and safety of numerous coronavirus vaccines, bringing a great deal of anticipation to stock markets.
The rally has been somewhat muted in recent days due to the short-term impacts of the second wave. However, as more news continues to come in and emergency FDA approvals start happening, there will inevitably be more bullish momentum.
Since the start of the pandemic, investors have wanted nothing more than details that provide more clarity on the situation and the duration of the pandemic. We are starting to get more details slowly, and this is making things look promising.
Many experts now predict it could be highly likely that almost all Canadians could be vaccinated by the end of 2021. That’s excellent news, as things could have turned out much worse, and the pandemic could have lasted a lot longer.
As more positive news comes out, and stock markets continue to gain momentum, this rally has the potential to create some significant opportunities.
Here are two millionaire-maker stocks I would consider buying before the market rallies any further.
TSX value stock rallying on vaccine news
The first stock to consider as more vaccine news comes out is Corus Entertainment Inc (TSX: CJR.B), a stock that has rallied considerably in the last month. Corus is a media and entertainment company that owns radio stations and T.V. channels. The majority of its revenue comes from advertising on T.V.
Several companies pulled their advertising campaigns during the initial stages of the pandemic in the spring, which impacted Corus’ revenue quite significantly. Despite the impact on revenue, though, Corus’ cash flow has remained robust, and the company elected to keep the dividend intact.
Part of the reason for the momentum in Corus’ shares today is due to the recent news of highly effective vaccines. However, it’s also due to the impressive earnings that Corus reported in late October. The company has been on the road to recovery since the start of the pandemic and continues to post strong numbers.
In fiscal 2020 Corus earned $0.75 per share in free cash flow, roughly in line with what analysts expect the company to earn in 2021. Today, Corus trades for just 5.7 times free cash flow. Furthermore, its dividend yields 5.6% and pays out just 33% of its free cash flow.
This insane value, coupled with its improving operations, makes it one of the top stocks to buy as more positive vaccine news continues to come out.
TSX energy stock
In addition to Corus, another high-quality business you could consider is an energy stock such as Suncor Energy Inc (TSX: SU)(NYSE: SU).
Energy stocks offer some of the best potential on the market, considering they have been one of the worst impacted industries from the pandemic. That’s why I would consider buying an industry leader like Suncor as more positive vaccine news comes out.
You have to be careful buying energy stocks these days as there is fear of more lockdowns. At the same time, however, these lockdowns, and the corresponding impact on oil demand that go with them, are short-term headwinds. Despite only impacting Suncor for the next few months, they could cause the stock to fall even further, creating an attractive entry point for investors.
There is still significant risk buying energy companies. That’s why you should stick to an integrated business like Suncor. Its diversified mix of assets help it to overcome sh0rt-term headwinds like the current shutdowns and keep the business operating with a high degree of resiliency.
The stock continues to trade more than 50% off its 52-week high, creating significant potential for long-term investors who buy before more positive vaccine news comes out. Plus, its dividend is currently yielding more than 4.1%.
Bottom line
Although the second wave of coronavirus continues to ramp up, with more positive vaccine news coming out almost daily, the end of the pandemic is now in sight. This will create a significant opportunity for investors, one that you won’t want to miss out on.
