Markets were at all-time highs before the pandemic struck and caused massive declines across the board. While it seemed that all hope was lost, most equity securities recovered rapidly in the months following the crash.
While the markets have continued to rally over the last few months, many top TSX stocks are still far from all-time highs. The pandemic might begin fizzling out this year with the increasing rollout of COVID-19 vaccines here in Canada and worldwide.
It means that the expected earnings growth compared to last year should drive several of the formerly high-flying Canadian stocks to record levels again. Here are the top three Canadian stocks that could provide you with massive gains in post-pandemic recovery.
The energy sector was in trouble before the pandemic was even a concern due to the oil price wars. The onset of the pandemic, ensuing lockdowns, and the subsequent decline in crude oil demand sent Canadian energy operators like Suncor Energy (TSX:SU)(NYSE:SU) falling off a cliff. The integrated energy giant has been weak due to the pandemic, but it is likely to experience a strong recovery in the post-pandemic environment.
Suncor’s scale and integrated operations give the company an edge over most of its peers. The company is well positioned to benefit from growing energy demand and higher crude oil prices as the world moves on from the pandemic. The company’s stable dividends and attractive valuation could make it an excellent addition to your portfolio right now.
Restaurant Brands International
Restaurant Brands International (TSX:QSR)(NYSE:QSR) is a darling stock that has been trading within a narrow range since last summer. The company managed to pivot and adapt to the changing environment as its locations closed down amid lockdowns to curb the pandemic’s spread.
Vaccination has started happening more actively throughout the country. Despite the extensive inoculations, the uncertainty regarding full-scale re-openings has delayed the stock’s recovery. The restaurant giant will hopefully not have to face the same challenges in the second half of this year.
The restaurant giant has Tim Hortons, Burger King, and Popeyes Louisiana Kitchen under its belt. The company’s recent aggressive approach to expansion in Mexico suggests that it anticipates a significant recovery after the pandemic, making it an ideal bet to consider for your portfolio’s growth.
Any discussion about post-pandemic stock picks will never be complete without talking about Air Canada (TSX:AC). The heavily battered airline stock is making massive waves this year amid the improving situation. Air Canada is trading for $26.74 per share at writing, and it is up by almost 21% on a year-to-date basis.
Air Canada’s terrific move from February after the government bailout hopes comes as no surprise. A decent bailout package could make the flag-carrying airline more resilient to power through the ongoing crisis. The company has a decent balance sheet compared to its peers, and it could be an excellent recovery play if the government eases border restrictions.
The current gains for the stock might be overdone. However, the airline’s share prices could soar once it can finally begin operating at full capacity.
With vaccination drives taking place successfully worldwide, we could see a drastic improvement in the global landscape regarding the pandemic. Several companies failed to recover due to the direct effects of the changing environment amid the pandemic. The hopes of a post-pandemic era are already improving valuations for these stocks.
I think it could be an ideal time to invest in Air Canada, Suncor Energy, and Restaurant Brands International if you are confident about the companies’ post-pandemic recovery.
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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. The Motley Fool recommends RESTAURANT BRANDS INTERNATIONAL INC.