The Motley Fool

The 3 Best TSX Stocks to Buy Under $100 in February

Image source: Getty Images

I believe the expected improvement in the economy, recovery in demand, and the continued spending on e-commerce is likely to spur business growth and support the uptrend in the top TSX stocks. While I remain optimistic about equities, I believe a few TSX-listed stocks are better placed than others to deliver outsized growth in 2021. 

I have chosen three top TSX stocks that you can buy right now to outperform the benchmark index handily in 2021. Also, you don’t need a large upfront investment amount, as these stocks are trading under $100. 

Lightspeed POS 

Lightspeed POS (TSX:LSPD)(NYSE:LSPD) stock delivered impressive returns in 2020, and I expect the momentum in its business to sustain in 2021, thanks to the strong secular tailwinds. Despite the easing of lockdown measures and expected growth in physical transaction volumes, I believe the adoption of e-commerce platform is likely to remain high and support the uptrend in Lightspeed stock. 

As the small- and medium-sized restaurant operators and retailers continue to shift towards the omnichannel platform, the demand for Lightspeed’s digital products is expected to remain elevated. Lightspeed’s cloud-based payment platform is expected to witness strong growth, while its payment revenues are likely to stay high, led by the continued increase in its customer locations. 

Lightspeed’s growing customer base, geographic expansion, and increased ARPU (average revenue per user) position it well to capitalize on the growing demand. Further, its recent acquisitions are likely to accelerate its growth and drive its customer locations. 

Suncor Energy

With the COVID-19 vaccine development and mass distribution expected in the second half of the year, now is the time to bet on Suncor Energy (TSX:SU)(NYSE:SU) stock while it is still trading low. I believe the economic expansion and revival of energy demand are likely to provide a strong base for growth. 

Crude oil prices have recovered significantly and are expected to trend higher in 2021. Meanwhile, the demand is likely to accelerate in the coming months, driving Suncor Energy stock higher. While Suncor’s revenues are likely to show sequential improvement, its low-cost base and integrated business model are expected to cushion its profitability. 

Suncor Energy stock is down about 45% in one year and presents an excellent entry point at the current price levels. Moreover, it offers a decent dividend yield of 3.9%.

Dye & Durham

Dye & Durham (TSX:DND) stock is expected to benefit from the economy’s reopening. Continued momentum in its base business and its recent acquisitions are likely to drive its revenues and adjusted EBITDA. 

Dye & Durham’s revenues and adjusted EBITDA have increased at a CAGR of 65% and 107%, respectively, from FY16 to FY20. Meanwhile, it completed 19 acquisitions since 2013.

Dye & Durham’s diversified customer base, high retention rate, and long-term contracts with its top 100 clients indicate that the company could continue to deliver strong revenues and EBITDA in the coming quarters. Moreover, Dye & Durham’s recent acquisitions are expected to accelerate its growth rate and support the uptrend in its stock.

Before you buy these under-$100 stocks, take a look at this free report now for under $50 value stocks...

Just Released! 5 Stocks Under $49 (FREE REPORT)

Motley Fool Canada's market-beating team has just released a brand-new FREE report revealing 5 "dirt cheap" stocks that you can buy today for under $49 a share.
Our team thinks these 5 stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune.
Don't miss out! Simply click the link below to grab your free copy and discover all 5 of these stocks now.

Claim your FREE 5-stock report now!

Fool contributor Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool owns shares of Lightspeed POS Inc.

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.