The New Year is a time when investors often reflect on their portfolios. Reflecting on your portfolio is crucial to understand what you did well and what you need to work on. It also gives you the chance to decide what TSX stocks you want to add to your portfolio.
You may look back on this year and think you had too much volatility, which could prompt you to look for safer, more defensive stocks to add to your portfolio.
Conversely, you may have been too risk-averse this year and are now looking to add some higher-growth stocks to your portfolio.
Regardless of what you think your portfolio may need, when high-potential opportunities present themselves, you don’t want to pass them up.
That’s why these are two of the top TSX stocks to consider buying when the market opens on Monday.
TSX value stock
Throughout 2020, savvy investors have been scouring the market for value. Ever since the market crashed and most TSX stocks tanked, there have been ample opportunities to find businesses trading cheap and earn a significant return on their recovery.
One stock that’s recovered quite substantially and earned investors a hefty return is Corus Entertainment Inc (TSX:CJR.B). Despite that decent recovery, the stock is still one of the cheapest on the TSX, offering investors major upside heading into 2021.
Corus is a media and entertainment company that makes the majority of its money through advertisements and subscriptions to its specialty channels and streaming service.
Early in the pandemic, Corus’ advertising revenue took a big hit. While it was enough to spook investors, it wasn’t enough to impact Corus severely. Management even elected to keep the dividend intact and ended up paying down some debt.
It’s been able to do this because its free cash flow generation has remained extremely robust through the pandemic. So with the stock trading this cheap, it make Corus one of the best investment you can make.
Today the TSX value stock trades for just over 5.5 times its forward earnings and pays a dividend that currently yields roughly 5.8%.
TSX growth stock
A value stock like Corus can provide superior returns in 2021. However, one TSX stock that could be even more rewarding for shareholders is Xebec Adsorption Inc (TSXV:XBC).
Xebec Adsorption is a clean technology company. The business produces industrial equipment that filters and purifies raw gasses, then transforms them into renewable natural gas or hydrogen.
Technology like this is groundbreaking, especially at a time when companies are being strongly incentivized to have cleaner business operations.
Traditional green energy companies offer investors incredible growth potential over the next few decades. However, cleantech stocks like Xebec offer considerably more potential.
The company is expected to see a significant increase in demand for its products over the coming years, which is why it’s no surprise the TSX stock is up more than 265% so far in 2020.
Despite this growth, Xebec is still a relatively small business. It has a market cap of just $840 million and still trades on the Venture Exchange, giving it a tonne of growth potential when it inevitably graduates to the TSX. Plus, with its rapidly growing services business, and the new hydrogen technology acquisition it recently made, investors can’t get enough of Xebec.
That’s why it’s one of the top TSX stocks to buy when the market opens Monday.
There are a tonne of high-quality TSX stocks to invest in going forward. However, there’s no question these two will be some of the top performers in 2021.
In addition to high-quality growth stocks like Xebec, check out these three high-potential tech stocks!
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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.
Fool contributor Daniel Da Costa owns shares of CORUS ENTERTAINMENT INC., CL.B, NV and Xebec Adsorption Inc.