The Motley Fool

2 TSX Stocks I’d Invest $2,000 in for 2021

Image source: Getty Images

2021 could turn out to be a strong year for Canadian companies, as wide-scale vaccine distribution is likely to accelerate the pace of economic recovery and support corporate earnings growth. While several TSX stocks look like attractive bets at the current levels, I have zeroed in on two top stocks that could continue to deliver exceptional returns in 2021.

Dye & Durham

Dye & Durham (TSX:DND) stock headed north ever since it got listed on the TSX in July 2020. Notably, an investment of $2,000 in Dye & Durham stock since its listing on the exchange is now worth $6,830. While Dye & Durham stock has appreciated quite a bit in a short span, the company remains on track to deliver impressive growth in 2021. 

Dye & Durham’s recent acquisitions and continued momentum in the base business could continue to drive its revenues and normalized EBITDA in the coming quarters and suggest that there is further room for multiple expansion.  

Dye & Durham’s recent acquisitions of SAI Global’s Property Division, DoProcess, and Courthouse Solutions are likely to expand its product portfolio and geographic reach. Moreover, these acquisitions are likely to drive its financials by opening up new growth opportunities. 

The company’s resilient business model, diversified and strong blue-chip customer base, and low churn rate suggest that it could continue to deliver strong organic growth. Meanwhile, its ability to put through price increases and debt capacity indicates that the uptrend in its stock could sustain in 2021. 

goeasy

goeasy (TSX:GSY) provides leasing and lending services to non-prime consumers and has delivered robust returns over the past several years through stock price appreciation and higher dividend payments.

The subprime lender continues to impress with its financial performance. goeasy’s earnings have grown at a strong double-digit rate over the past two decades. Thanks to its high-quality earnings base, goeasy has consistently paid dividends for 16 years and has uninterruptedly increased the same in the last six years. 

goeasy’s operating metrics remain solid. Its same-store sales have increased in the past 42 consecutive quarters. Meanwhile, its gross loan originations remain strong. The company’s resilient business model helped it deliver robust bottom-line growth in the first nine months of 2020, despite the disruption from the COVID-19 pandemic.

With the economic reopening and vaccine distribution, goeasy is likely to witness strong consumer demand, which is expected to drive its loan origination volumes in 2021. During the last reported quarter, the company’s CEO, Jason Mullins, said that “consumer demand for credit continues to recover slowly and we expect growth in the loan portfolio of approximately 5% to 6% during the upcoming quarter.”

With the expected improvement in the loan portfolio, new customer additions, and lower expenses, goeasy could deliver strong double-digit growth in its top and bottom line in 2021. Meanwhile, the expansion of its product offerings and growing footprint should support its growth and drive its earnings. 

goeasy pays a quarterly dividend of $0.45 a share, translating into a decent dividend yield of 1.9%.  

Bottom line   

Both these Canadian companies have consistently impressed with their financial performance. I believe the uptick in economic activities and sustained momentum in their base could support these stocks in 2021. Meanwhile, opportunistic acquisitions and acceleration in demand could drive these stocks higher. 

Are you a fan of high-growth stocks? Take a look at this free report now:

This Tiny TSX Stock Could Be the Next Shopify

One little-known Canadian IPO has doubled in value in a matter of months, and renowned Canadian stock picker Iain Butler sees a potential millionaire-maker in waiting...
Because he thinks this fast-growing company looks a lot like Shopify, a stock Iain officially recommended 3 years ago - before it skyrocketed by 1,211%!
Iain and his team just published a detailed report on this tiny TSX stock. Find out how you can access the NEXT Shopify today!

Click here to discover how!

Fool contributor Sneha Nahata has no position in any of the stocks mentioned.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.

I consent to receiving information from The Motley Fool via email, direct mail, and occasional special offer phone calls. I understand I can unsubscribe from these updates at any time. Please read the Privacy Statement and Terms of Service for more information.