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Forget Volatility: 3 Top TSX Stocks to Buy Now for Superior Returns in 2021

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Rising crude oil prices, stretched valuations, and uncertainty over the interest rate environment is likely to keep the stock market volatile for weeks. Despite the volatility, a few TSX stocks are expected to sail smoothly and deliver superior returns in 2021. 

Let’s take a closer look at three low-risk Canadian companies that are expected to deliver stellar returns. 

Algonquin Power & Utilities

Algonquin Power & Utilities (TSX:AQN)(NYSE:AQN) has made investors rich irrespective of the economic situation. Its stock has appreciated by about 485% over the past 10 years. Meanwhile, the utility company has bolstered its shareholders’ returns further through a consistent dividend hike during the same period.   

The stock market volatility is unlikely to impact its business as Algonquin Power & Utilities’s high-quality utility assets deliver predictable and growing cash flows. Meanwhile, about 85% of its power output is backed by long-term contractual arrangements.  

The company projects double-digit growth in its rate over the next five years, which provides a strong foundation for stellar growth in its adjusted EBITDA and earnings. Moreover, its growing earning base is likely to drive its dividends and share price. Algonquin Power & Utilities’s conservative business mix, strong balance sheet, and robust earnings outlook make it a top investment for 2021. Also, the company announced a 10% hike in its dividends for 2021.


Shares of the food and pharmacy leader Loblaw (TSX:L) are likely to be largely unaffected by the stock market volatility. The consistent demand for its products and offerings and resilient business are likely to support its revenues and earnings. Moreover, the expansion of its digital capabilities augurs well for future growth and is likely to drive its market share and, in turn, its stock in 2021. 

Loblaw’s strategy to add convenience for its shoppers is likely to act as a key growth catalyst and is likely to boost its same-store sales growth despite the tough year-over-year comparisons. The company’s connected health offerings, expansion of click-and-collect services, doorstep delivery, and payments and rewards could continue to push its sales higher and remain accretive to its gross margin. 

Notably, Loblaw stock is trading at a discount to its peers and presents a good entry point for long-term investors with a low-risk appetite. 

Goodfood Market

The online grocery and meal solutions provider Goodfood Market (TSX:FOOD) is another top bet to earn strong returns irrespective of the volatility in the broader markets. The demand for its services and offerings remains elevated, thanks to the growing adoption rate and solid growth in its active subscriber base. 

Goodfood Market’s active subscriber base jumped by 30% in Q2, reflecting the growing adoption of online grocery and meal solutions. I remain bullish on Goodfood Market stock, as its initiatives to expand the product offerings, same-day delivery services, and cross-selling efforts provide a strong base for future growth. 

The favourable industry trend, its growing scale, and leadership position in Canada’s online grocery market provide strong growth opportunities and are likely to support the uptrend in its 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 Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool recommends Goodfood Market.

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