The companies with market capitalization falling between $2 billion and $10 billion are classified as mid-cap stocks. These stocks are in the middle of their growth curve, thus offering a balance of both growth and stability. Mid-cap companies are less riskier compared to small-cap stocks but are riskier than large-cap stocks.
Here are the three mid-cap stocks that can grow and increase their market share, productivity, and profits in the coming years.
With the world moving towards renewable energy amid the rising pollution, my first pick would be Northland Power (TSX:NPI), which develops, owns, and operates clean energy assets in Canada and Europe. The company earns most of its revenue from long-term agreements, thus insulating its financials from volume and price fluctuations. Despite the challenging year, the company’s top line and bottom line have grown by 28.4% and 17.2% in the first three quarters, respectively. Its free cash flows have increased by 15%.
Meanwhile, Northland Power’s growth prospects also look healthy. In the third quarter, the company had acquired three onshore wind projects in New York, with a capacity to produce approximately 300 megawatts of power. The company plans to utilize these acquisitions as a launchpad to expand its footprint in the United States’s growing renewable energy market.
Further, the company has an extensive pipeline of offshore wind projects in Europe and Asia, which could boost its earnings in the coming years. The company pays monthly dividends of $0.10 per share with a dividend yield of 2.8%.
Driven by its strong fundamental growth, Northland Power stock has appreciated over 64% this year. Meanwhile, given the favourable environment and its strong growth prospects, I expect the rally to continue.
My second pick would be BlackBerry (TSX:BB)(NYSE:BB), which provides cybersecurity, safety, and data privacy solutions. On December 1, the company had announced to have joined hands with Amazon Web Services to develop an IVY cloud-connected software platform.
The platform would allow automakers to read vehicle sensor data securely and create actionable insights. IVY could accelerate the development of new offerings that could improve vehicle performance and lower maintenance and repair expenses. So, since the announcement, the company’s stock has increased by 37.8%.
Meanwhile, BlackBerry is strengthening its position in cybersecurity and endpoint management solutions through its Spark Suite platform, which has been in great demand since its launch in May. Its QNX segment has witnessed significant improvement amid the recovery in the automotive sector following the reopening of the economy. So, given its improving growth prospects, I expect BlackBerry to deliver substantial numbers in 2021.
Cargojet (TSX:CJT) provides air cargo services to 15 major cities in Canada and some selected international destinations. Driven by its strong fundamental growth, the company has returned 769% in the last five years at a CAGR of 54%. The company currently enjoys a significant share in domestic air cargo volumes, thanks to its array of 27 aircraft and unique overnight delivery service.
Cargojet earns 75% of its revenue through long-term contracts, shielding its financials from volume fluctuations. Further, its high customer retention rate, expansion of its network and fleet size, and improving margins are encouraging. Amid the pandemic-infused lockdown, many small and medium retailers took their business online. This structural shift towards e-commerce has created a multi-year growth potential for Cargojet. So, given its high-growth prospects, I am bullish on Cargojet.
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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.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. David Gardner owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon and CARGOJET INC. The Motley Fool recommends BlackBerry and BlackBerry and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned.