If 2020 was a year for recovery, 2021 might well be a year of growth. Investors are optimistic, and the TSX has been growing at a steady rate. Even the energy sector, which was bringing down the TSX in 2020, thanks to its sheer weight, was doing relatively fine up until two weeks ago.
Many of the stocks have already recovered their pre-pandemic valuations and are now soaring to new heights. But many are still “on their way” to proper recovery, and these are the stocks you might consider buying before April or lose the valuation/price discount that the 2020 market crash offered.
A financial services company
Sun Life Financial (TSX:SLF)(NYSE:SLF) is a financial company that offers investments, asset management, insurance products, and financial advisory services to Canadians. This Toronto-based company has a market capitalization of $36.9 billion.
Sun Life is also a Dividend Aristocrat and currently offers a modest yield of 3.59%. The company has grown 64% in the last 12 months and has almost recovered its pre-pandemic valuation. But the share price is still 3.7% down, and the price-to-earnings is at 15. If you believe that the company will recover and go past its pre-pandemic peak soon, it might be time to lock in this yield and buy when it is still reasonably valued.
A retirement residence company
Chartwell Retirement Residences (TSX:CSH.UN) is in the niche market of retirement residences. The company owns and operates 198 places, comprising over 30,000 individual suites. The occupancy rate of 82.2% might seem low compared to other residential or commercial REITs, but it might not be that low for retirement residences.
The company still has a long way to go to even reach near its pre-crash valuation, but the company was never a good growth bet anyway. It’s a decent dividend stock, though, and is currently offering a juicy 5.5% yield. It is a Dividend Aristocrat. If you are considering adding this relatively stable dividend stock to your portfolio, you might consider buying soon, when you can still lock-in a lucrative yield.
A railway company
One company has recovered its pre-crash valuation months ago, but if you don’t have it in your portfolio yet, you might be missing out on the great growth opportunity it offers. The Canadian Pacific Railway (TSX:CP)(NYSE:CP) is one of the most consistently growing stocks in the transportation sector. It has a 10-year CAGR of about 23.5%, and the company has grown its market value by about 2,881% in the last 20 years.
And the best part is that this fantastic growth stock is not too overvalued. It is overvalued, just not too much. It has a price-to-earnings of 25 .5 and a price-to-book of 8.3 times. It’s also a Dividend Aristocrat. There is relatively limited competition in the railway industry, and CP, with its market capitalization of $59 billion, is one of the few major players in this industry.
When you are trying to buy recovering stock, it’s usually a good idea to try and act as soon as possible or lose the chance to buy low. When you are looking for soaring stocks, it might be prudent to wait for a dip, so you buy at a relatively attractive price. But the problem is that some growth stocks are very consistent in their growth, and if you wait too long, they might keep getting expensive over time.
Speaking of three stocks you might consider buying before April...
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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 Adam Othman has no position in any of the stocks mentioned.