The year 2021 is shaping up to be a much different year than 2020 for TSX stocks. 2020 may not feel that different to Canadians, who will face much of the same lockdowns and coronavirus restrictions. Financial markets are forward-looking, though, and 2021 offers a lot of opportunities.
Whether there is potential as stocks recover from the impacts of coronavirus or whether the stocks may now finally break out as investors have more confidence in making long-term investments, here are four of the top stocks to buy for 2021, all under $10 a share.
TSX media and entertainment stock
The first stock to consider is one of the top value stocks on the TSX, Corus Entertainment Inc (TSX: CJR.B).
Corus is a TV media company with streaming platforms and its own content creation business. The company has been on a long turn-around over the past few years and was sold off heavily in the pandemic, as investors feared its turnaround would be derailed.
Corus has proven the doubters wrong, though, mitigating the impacts of the virus and continuing to generate incredible free cash flow, allowing it to continue to pay down debt and improve the balance sheet while keeping the dividend intact.
Its business fundamentals continue to strengthen at the same time the impacts from the pandemic are easing. Therefore, at a forward price to earnings ratio of less than 7.0 times, Corus is one of the most attractive value stocks today.
Sports media and gambling company
In addition to a value stock like Corus, you may want to consider a growth stock like Score media and Gaming Inc (TSX: SCR).
Score has been attractive for the last few years as it has grown its sports gambling business. The company has had one of the top mobile applications for sports fanatics and has used its massive user base to grow its sports gambling business since the two go hand in hand.
Plus, with several jurisdictions legalizing sports betting recently, the stock has had a tonne of momentum.
Sports are still being impacted, and the effects are being carried over to Score, but over the next few years, as sports recovers and Score continues to build up its business, it could offer investors incredible growth.
TSX energy stock
One industry you should definitely consider if you want to play the recovery of the coronavirus pandemic is energy.
Energy stocks were sold off heavily in 2020. With the end of the pandemic insight, though, energy stocks have started to see significant momentum. Oil prices have been rising recently, and investor sentiment is growing along with it.
While there are several high potential energy stocks to consider, one of the best today is Freehold Royalties.
Freehold is low risk and offers investors both a 3.8% dividend as well as significant capital gains. That’s why it’s one of the top TSX stocks to buy for 2021.
Restaurant royalty stock
Finally, investors looking for a little more stability should consider an investment in Pizza Pizza Royalty Corp (TSX: PZA).
Pizza Pizza is a TSX stock that receives a top-line royalty on all sales from its pool of restaurants. Having a royalty that is tied to sales rather than profitability means a lot less risk.
Investors don’t have to worry about individual restaurant profitability, and sales numbers also tend to be much less volatile than profitability. That’s why Pizza Pizza’s 7.1% dividend is almost always quite stable.
The company did have to trim it slightly at the beginning of the pandemic. However, Pizza Pizza fared far better than many of its competitors. Plus, it’s already started to raise the dividend back towards pre-pandemic levels.
As its business will continue to recover, investors can expect more dividend hikes, which will surely lead to more capital gains. That’s why Pizza Pizza is such a great choice today for those investors seeking more stability.
