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4 Top TSX Stocks to Buy in 2021

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The market is at a turning point. Some analysts think stocks are ready to plunge. Others believe they’re set to reach new highs this year. Wherever the market heads, certain investments can perform in any environment. Four of your top choices are below.

Double your money

Shopify (TSX:SHOP)(NYSE:SHOP) stock has doubled in value nearly every year since going public. If you put money down in 2015, the year of its Initial Public Offering (IPO), you would have made 40 times your original investment. A $250 bet would now be worth $10,000.

The secret is software. Unlike companies that produce physical goods, Shopify can grow insanely fast at nearly zero cost. All that needs to happen is for another customer to sign up online to use its e-commerce platform.

Right now, more than half of all digital shoppers go to Amazon first. The rest of the market is controlled by thousands of independent storefronts. Shopify provides the software that runs that other half of the market.

Amazon is currently worth 20 times more than Shopify. Expect that discount to narrow this year.

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This stock generates serious income

If Shopify is a growth engine, Enbridge (TSX:ENB)(NYSE:ENB) is an income generator. Right now, the dividend yield stands close to 8%. That’s impressive considering the payout has increased every year for several decades.

In a nutshell, Enbridge is a toll road operator, but rather than transporting cars, it ships fossil fuels. If an oil or gas company wants to get its production to market, it often needs to use Enbridge’s infrastructure.

This all culminates in pricing power over its customers, a big reason for the stock’s consistent double-digit annual gains since 1995. With its monopolistic infrastructure still in place, this is a great place for income investors to be this year.

Don’t forget to go small

Shopify and Enbridge have huge, multi-billion dollar market caps. If you want truly spectacular gains, you need to go smaller. After all, it’s easier to double in size as a $300 million business versus a $3 billion business.

If you want to go small, goeasy (TSX:GSY) should be a top pick. This financial institution focuses on small loans (under $35,000) to non-prime borrowers (people with less-than-stellar credit).

This segment of the market is small enough to be ignored by major banks, and goeasy has used that dynamic to make shareholders rich. The stock is up nearly 500% over the last five years.

Few investors know about this company, but there should be another double ahead.

Trust the stock market master

Fairfax Financial (TSX:FFH) is headed by Prem Watsa, who is often referred to as the Warren Buffett of Canada. He earned that moniker the hard way, by producing 13% annual stock price gains since 1986.

There are so many stocks worth buying in 2021. By owning Fairfax stock, you acquire the oversight of Canada’s most proven investor. Watsa manages the entire capital pool at Fairfax, and his resume is unmatched.

Now trading at less than book value, FFH stock looks like a bargain. This should be a strong consideration for any diversified portfolio in 2021.

Our best stock picks for 2021 is on the FREE list below.

The 10 Best Stocks to Buy This Month

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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. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Amazon, Enbridge, Shopify, and Shopify. The Motley Fool recommends FAIRFAX FINANCIAL HOLDINGS LTD and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. Ryan Vanzo has no position in any stocks mentioned.

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