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3 Top Canadian Stocks to Buy Under $30 for Superior Returns

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The Canadian equity markets continue to rise, hitting a new all-time high on Friday. The S&P/TSX Composite Index is up 4% for the year. Amid increased investors’ confidence, here are the three top Canadian stocks to buy under $30 for higher returns.

BlackBerry

After witnessing a wild swing over the last few weeks, BlackBerry (TSX:BB)(NYSE:BB) stock appears to have settled, providing an excellent buying opportunity. The company’s growth prospects look healthy. It has partnered with Amazon Web Services to develop and market an intelligent vehicle data platform, IVY, which could help automakers bring new in-vehicle applications quickly to the market.

Further, BlackBerry is focusing on the growing EV (electric vehicle) market. Last month, the company expanded its three-year-old partnership with Baidu. The new agreement allows Baidu’s high-definition maps to run on BlackBerry’s QNX Neutrino real-time operating system, helping Chinese automakers to develop next-generation connected autonomous vehicles.

The company is also expanding its market share in the cybersecurity and endpoint management market through its Spark Suite and Cyber Suite platforms, which have received positive customer responses. Despite its high-growth prospects, BlackBerry is still trading at an attractive valuation, with its forward price-to-sales and price-to-book multiples standing at 4.8 and 2.4, respectively.

Suncor Energy

Amid the improvements in the global energy demand and tightening of stockpiles, crude oil prices are trading at a 12-month high. With its business model built on capturing the full value through integration and its long-life, low-decline assets, Suncor Energy (TSX:SU)(NYSE:SU) is well positioned to benefit from higher oil prices.

The company has taken various cost-cutting initiatives, which have helped in bringing its operating expenses down. The company’s management projects its operating expenses to come down by around 8% this year, while its production could increase by approximately 10% following its last year’s maintenance program.

Meanwhile, Suncor Energy’s management expects to sustain its business and pay its dividends, with the WTI crude oil trading at around US$35 per barrel. With WTI crude trading around US$57 per barrel and the improvement in its operating metrics, I expect Suncor Energy to deliver substantial numbers this year. The company also pays quarterly dividends, with its dividend yield currently standing at 3.8%.

Aphria

I had given a buy call on Aphria (TSX:APHA)(NASDAQ:APHA) on November 6 following the legalization of cannabis by five more states in the United States. If you had bought the stock then, you would be sitting around 200% returns by now. However, I believe the upward momentum could continue, given the expanding cannabis market and its growth initiatives. The increased expenses due to COVID-19 have severely dented many states’ budgets in the U.S., which are now looking for other revenue sources to close their budget gaps. So, I believe some more states could legalize cannabis, bringing in much-needed revenue.

Further, Aphria’s acquisition of SweetWater Brewing Company and the proposed merger with Tilray could strengthen its position in Canada, the U.S., and also European markets. The merger could deliver $100 million in savings within the two years of completing the transaction, given the synergies between Aphria and Tilray. Aphria’s management expects to secure the deal by late April or early May.

Meanwhile, Aphria has already acquired a significant market share in Canada, supported by the strong performance from its vape and dried flower segments. The company had outperformed both analysts’ top-line and bottom-line expectations in its recently reported second quarter. It also reported positive adjusted EBITDA for seven consecutive quarters.

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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 and Baidu. Tom Gardner owns shares of Baidu. The Motley Fool owns shares of and recommends Amazon and Baidu. The Motley Fool recommends BlackBerry and BlackBerry and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned.

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