Last year was full of doubt and worry, especially financially. This year, it’s all about recovery. Hopefully the economy recovers with a COVID-19 vaccine finally being distributed. That means there are plenty of top TSX top stocks that could see serious returns this year and beyond.
In fact, it won’t take much. Just $1,000 in any of these three TSX top stocks could see serious returns in 2021.
Kinaxis Inc. (TSX:KXS) is a Software-as-a-Service company that provides supply chain management to enterprise companies. These companies range from private to government enterprises around the world. The shift to online during the pandemic has seen a surge in the need for companies like Kinaxis. A surge that is likely to only increase this year and beyond.
Kinaxis stock soared 50% in the last year, and 424% in the last five years for a compound annual growth rate (CAGR) of 39.12%! The company reported 29% year-over-year revenue growth during the most recent quarter, and should continue to see similar results during its next earnings report next month. An investment of $10,000 in Kinaxis five years ago would have earned you $50,000 today!
It can’t be denied that convenience store chain Alimentation Couche-Tard Inc. (TSX:ATD.B) had a rough year in 2020. With fewer people attending retail locations, that alone hurt the bottom line. But with more people working from home, that also meant the loss of commuter traffic.
That means 2021 is likely to be an entirely different story. The company has a solid balance sheet, and was even expanding while revenue slumped. Alimentation recently expanded into Norway and Asia, opening the door for even more locations beyond its thousands in North America.
Revenue was down 18% compared to the same time last year during the latest quarter. Despite that, there have been no dividend cuts to the company’s 0.88% dividend yield, continuing its reign as a Dividend Aristocrat. As the world recovers, expect a solid rebound in revenue from this company.
Share are down 9% in the last year, but up 49% in the last five years. A $10,000 investment in Alimentation five years ago would give you $13,706 today, with dividends included.
Everybody is waiting to see what’s going to happen with Air Canada (TSX:AC), and I’ll be honest: it’s going to be a while before there’s a solid rebound. Even with the vaccine, it’s likely airlines are going to change forever after this pandemic. That’s going to be further costs to this major airliner.
But here’s the silver lining. The company already made a huge investment that created far more efficiency than its competitors. The company has fuel-efficient aircrafts, bought back Aeroplan, and has been making cuts to stay afloat.
The only hiccough is waiting on the AirTransat purchase, which is frankly something investors should be happy about as this would only increase the debt load.
Air Canada’s recent earnings report for 2020 painted a bleak picture, one the company hopes is behind it. It now has $8 billion in liquidity, and reported a 70% decline in revenue from the previous year.
While shares in Air Canada stock are down 50% in the last year, they’re still up 208% in the last five years! If you had bought a $10,000 investment then, you would have $31,604 today from Air Canada stock!
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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.
Fool contributor Amy Legate-Wolfe owns shares of AIR CANADA and KINAXIS INC. The Motley Fool owns shares of and recommends ALIMENTATION COUCHE-TARD INC. The Motley Fool recommends KINAXIS INC.