Large-cap companies are relatively stable and have proven their worth through solid financial and operating performance over the past several years. Since these companies are large, they may not grow as fast as smaller rivals, but this doesn’t mean they cannot generate high returns.
We’ll discuss three top large-cap stocks listed on the TSX that could deliver stellar returns in 2021.
Shopify (TSX:SHOP)(NYSE:SHOP) comes as a natural choice to me when it comes to large-cap stocks offering high growth. The e-commerce behemoth is Canada’s most valued publicly traded company with a market cap of over $170 billion. Meanwhile, Shopify has generated exceptional returns over the past several years and made its shareholders very rich.
Its stock has appreciated by 933% in three years. Meanwhile, it rose by about 166% in one year. While the rally in its stock makes it unattractive on the valuation front, investors looking for high growth shouldn’t hesitate to buy it right now.
Shopify stock is expected to benefit from positive secular trends that offer a multi-year growth opportunity. As businesses continue to move towards the omnichannel platform, Shopify’s digital products are witnessing high demand, and I believe the demand could sustain in the coming years, providing a solid base for growth.
Shopify’s gross merchandise volume and revenues continue to grow at a brisk pace. Meanwhile, its adjusted operating expenses as a percentage of sales are trending down, which is encouraging.
With rising e-commerce spending and expansion of its high-value products, Shopify remains well positioned to deliver robust growth in 2021 and beyond.
With a market of over $130 billion, Toronto-Dominion Bank (TSX:TD)(NYSE:TD) is another top large-cap stock that should be on your radar for stability and growth. The bank’s ability to drive loans and deposits and diversified business mix positions it well to benefit from the recovery in demand.
I believe banks could witness strong credit growth in 2021, as vaccine distribution is likely to accelerate the pace of economic recovery. Meanwhile, strong expense management and reduction in provisions are likely to drive profitability.
Toronto-Dominion Bank’s strong balance sheet, retail focus, and the U.S. expansion could help it to deliver strong growth. Meanwhile, investors are likely to benefit from Toronto-Dominion bank’s robust dividend payments. The bank’s dividends have grown at an average annual rate of 11% since 1995. Meanwhile, it currently offers a yield of 4.4%.
TC Energy‘s (TSX:TRP)(NYSE:TRP) strong balance sheet and high-quality energy infrastructure assets make it a top large-cap stock that offers stability and income. The pipeline company generates most of its revenue and earnings from businesses that are either regulated or have long-term contracts, implying that volatility in volumes and commodity prices aren’t likely to impact its business much. Moreover, it helps the company to deliver robust cash flows that drive its dividends.
While its core business remains strong, its $37 billion secured growth projects are expected to drive its profitability and dividends in the coming years. The company projects an 8-10% growth in its dividends for 2021.
Notably, TC Energy is a Dividend Aristocrat and currently offers a high yield of 6.2%.