2 Top Stocks for January 2021

For those looking to get 2021 started off right, these are two great picks to consider!

| More on:
Gold medal

Image source: Getty Images.

Want to get the year started off right?

Are you thinking about the stocks you want to pick up next year?

These three Canadian stocks ought to be on your radar, if this is the case. With so many great value options available on the TSX, it’s hard to choose a list of just three. That said, I’ll do my best. Here are my top three picks for investors looking to get 2021 started with a bang.

Kirkland Lake Gold

As I wrote about in a previous pieceKirkland Lake Gold (TSX:KL)(NYSE:KL) is a great pick for every investor. Some investors may think this is only a play for gold bugs. In fact, nothing could be further from the truth.

Gold stocks are now trading at a three-decade low, relative to the price of gold. Companies like Kirkland Lake are extremely undervalued at these levels. Investors appear to be factoring in a long-term price of gold in the US$1,400 to US$1,500 range. This is simply out of whack with reality, both in terms of where gold prices are today and where they are likely headed in the future.

Stimulus is only going to pick up. The average Canadian or American Joe can’t survive without stimulus today. Stimulus checks continue to be printed, and this requires more debt accumulation and money printing. Until the printing presses are turned off, gold will continue to be supported at higher levels.

These macro trends will not relent, perhaps ever. We’ve entered a new phase of monetary and fiscal stimulus. Gold is not only a hedge; it’s a great investment over the long term for investors looking for stability. The returns on gold have been sub-standard but have done their job in holding steady during periods of volatility. I expect more volatility on the horizon and think we’re a long way out from this recession coming to an end. Loading up on Kirkland Lake is a great way to get some defensive exposure.


From a value perspective, few investments look as good as Enbridge (TSX:ENB)(NYSE:ENB) right now.

The energy sector continues to be depressed as a result of the coronavirus pandemic and low commodity prices. The reliability of counterparty payments to Enbridge has come into question. Indeed, the viability of the business models of so many of the company’s upstream partners has become a problem for energy transportation companies like Enbridge.

That said, there’s a lot to like about Enbridge’s business model. This company is perhaps the best way to get exposure to the energy sector without direct exposure to commodity prices. The dividend Enbridge pays is well covered and looks cheap relative to long-term earnings growth. This earnings growth is expected to come from new projects as well as price improvements over time.

If the price of oil does continue to rebound and steady, long-term investors could do very well with Enbridge. In the meantime, this stock pays investors a juicy 8% dividend to sit and wait.

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 Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Enbridge.

More on Top TSX Stocks

Wireless technology
Dividend Stocks

5 Things to Know About Telus (TSX:T) Stock

Telus offers a diversified business model and steady dividend growth. Is it a buy in this market?

Read more »

Caution, careful
Top TSX Stocks

Proceed With Caution When Considering These 3 Ultra-Popular Stocks

Three ultra-popular stocks and brands in Canada are risky investment options today, but for different reasons.

Read more »

Hand arranging wood block stacking as step stair with arrow up.
Top TSX Stocks

1 Canadian Company That Could Be Worth $1 Trillion By 2042

CN Rail stock won't make you rich overnight, but it certainly could over the next 20 years.

Read more »

a Couche Tard store
Top TSX Stocks

Why Alimentation Couche-Tard Stock Fell 5% in September

Couche-Tard stock took a hit in September, but the downside pressure could be short-lived considering its commitment to innovation and…

Read more »

Chalk outline of two arrows pointing in opposite directions
Top TSX Stocks

2 TSX Stocks That Can Deliver Massive Gains in a Recession

Restaurant Brands International (TSX:QSR)(NYSE:QSR) stock and another recession-resilient firm that can win big in 2023.

Read more »

Growth from coins
Dividend Stocks

3 Canadian Dividend Stocks That Are Dirt Cheap Right Now

These three Canadian dividend stocks look attractive with their above 6% yields and cheaper valuations.

Read more »

Money growing in soil , Business success concept.
Dividend Stocks

3 TSX Stocks That Could Make You a Millionaire

These three TSX stocks each have outstanding potential while trading undervalued today, creating significant opportunities for investors.

Read more »

Glass piggy bank
Top TSX Stocks

Dollarama Stock Plus 2 Other Growth Stocks for Long-Term Wealth Creation

Dollarama is among the top growth stocks to buy for their stellar track records of shareholder value creation and operational…

Read more »