5 Under $50 TSX Stocks to Buy Now for Superior Returns

The economic expansion amid ongoing vaccination provides a solid base for growth in Canadian stock.

| More on:
work from home

Image source: Getty Images

The economic expansion amid ongoing vaccination provides a solid base for growth in equities. As economic activities begin to gain pace, I expect consumer demand to revive and drive Canadian stocks higher. With the improving economic environment, let’s look into five such top TSX stocks that could deliver superior returns. Moreover, these stocks are trading under $50. 

Real Matters

Real Matters (TSX:REAL) stock is looking attractively priced at the current price levels. It has declined over 40% despite the favorable operating environment. A lower interest rate environment and a strong U.S. mortgage market provide a strong base for growth. Meanwhile, the sharp pullback in its stock presents an excellent buying opportunity for long-term investors. 

I expect the interest rates could continue to trend lower for an extended period, providing a strong growth catalyst. Meanwhile, Real Matters’ strong blue-chip customer base and a large addressable market augur well for growth. Refinancing volumes are expected to remain elevated, driving its revenues and earnings. 

Suncor Energy  

Suncor Energy (TSX:SU)(NYSE:SU) stock increased about 28% in three months on increased economic activities and hopes of a recovery in demand. I believe higher production and an increase in oil prices could drive Suncor Energy’s revenues and earnings, in turn, its stock. 

Improving energy demand and Suncor’s low-cost base are expected to support its margins and dividend payments. Despite the recent buying, Suncor stock continues to trade cheap, providing a good buying opportunity for long-term investors. Also, it offers a healthy annual yield of 3.2%.

Algonquin Power & Utilities

Algonquin Power & Utilities (TSX:AQN)(NYSE:AQN) has delivered strong returns over the past several years. Besides, it has boosted its shareholders’ returns through higher dividend payments. It generates strong earnings and cash flows that are backed by its high-quality rate-regulated asset base. Further, strategic acquisitions are likely to bolster its growth rate. 

The utility company expects its rate base to increase at an average annual growth rate of 11% through 2025, which is likely to drive its earnings and future dividends. Algonquin Power & Utilities has announced a 10% hike in its dividend for 2021 and offers a yield of 4.1%. 

Goodfood Market

The demand for online grocery services is expected to remain elevated, driving Goodfood Market (TSX:FOOD) stock higher. Goodfood Market has delivered strong financial performance over the past several quarters, reflecting its growing customer base and increased demand. 

I expect Goodfood Market’s active customer base to continue to increase at a high double-digit rate in the coming quarters. Moreover, its strong delivery capabilities growing footprint are expected to drive its revenues and margins, in turn, its stock.

Absolute Software 

Absolute Software (TSX:ABST)(NASDAQ:ABST) has delivered stellar returns in the past and significantly outperformed the broader markets. Moreover, I expect the momentum in Absolute Software stock to continue, reflecting higher spending on cybersecurity threats. Thanks to the sustained demand, its annual recurring revenue remains strong, providing increased visibility for future growth. 

Moreover, its large customer base, high retention rate, and strong balance sheet bode well for growth. Also, its expansion in developing regions and up-selling opportunities are expected to drive its revenues and adjusted EBITDA. Meanwhile, Absolute Software stock trades at a lower valuation compared to its peers.

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 Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool recommends Goodfood Market and Real Matters Inc.

More on Tech Stocks

Woman has an idea
Tech Stocks

2 No-Brainer Stocks to Buy With $500 Right Now

Given their solid financials, healthy growth prospects, and attractive valuation, I am bullish on these two TSX stocks.

Read more »

Business success with growing, rising charts and businessman in background
Tech Stocks

A Bull Market Is Coming: 1 Growth Stock Down 33% to Buy and Hold Forever

Here's why quality growth stocks such as Aritzia are compelling long-term bets for TSX investors.

Read more »

Shopping and e-commerce
Tech Stocks

1 Tech Stock You’ll Be Glad You Bought When the Bull Market Starts

Historically, tech stocks have done well during bull markets. Here’s one you’ll be happy you bought before the next bull…

Read more »

A person builds a rock tower on a beach.
Dividend Stocks

3 Stocks to Anchor Your Portfolio in a Rocky Market

Three stocks are solid anchors in any portfolio today for their outperformance in a weak market and defiance of the…

Read more »

edit Sale sign, value, discount
Tech Stocks

2 Cheap Tech Stocks to Buy Right Now

Many tech stocks offer exceptional returns compared to other stock sectors when the market is bullish. You can add to…

Read more »

Hands shaking over a business deal
Tech Stocks

Got $5,000? These 2 Growth Stocks Are Smart Buys

Are you looking to invest $5,000 in the stock market? Here are two of the best growth stocks you can…

Read more »

man sitting in front of 3 screens programming
Tech Stocks

2 Best Software Stocks to Buy in 2023 and Beyond

Salesforce (NYSE:CRM) and Constellation Software (TSX:CSU) are the two best software stocks to buy this year and beyond.

Read more »

consider the options
Tech Stocks

Is it Too Late to Buy Shopify Stock?

Shopify is one of the most popular stocks on the market. Is it too late to buy shares?

Read more »