Despite the ongoing vaccination campaign, Canada’s chief public health officer, Dr. Theresa Tam, urges stronger measures to stop the rapid growth of COVID-19 cases. However, the resurgence of coronavirus hasn’t shaken the stock market thus far. The TSX is up 7.57% year to date.
Interestingly, two Canadian giants are outperforming the broader market. The shares of both companies have risen by 15% in 2021. Shareholders of Toronto-Dominion Bank (TSX:TD)(NYSE:TD) and Nutrien (TSX:NTR)(NYSE:NTR) are certainly impressed by the performance, notwithstanding the prevailing market uncertainty.
Resilient as ever
Canada’s second-largest bank is proving once more its resiliency during challenging times. With its market cap of $148.61 billion (as of March 23, 2021), Toronto-Dominion Bank is the third-largest publicly listed company on the TSX. The current share price of $82.88 is 45% higher than it was a year ago.
The financial services sector is also performing better than the TSX with its 13.92% year-to-date gain. Market analysts are bullish on TD, and they forecast the price climb further to $91 (+10%) in the next 12 months. For would-be investors, this blue-chip stock pays a 3.81% dividend. The payouts should be safe and sustainable, given the 47.95% payout ratio.
If you’ll recall, TD was the only company that reported top- and bottom-line growth during the 2008 financial crisis. Risk-averse investors have confidence in the bank stock, because it had endured severe economic downturns, including the 2020 health crisis. Also, the dividend track record is more than 160 years.
By mid-2021, expect TD to have a stronger electronic bond trading infrastructure when it acquires Headlands Tech Global Markets. The latter’s proprietary software delivers fully automated electronic market-making in municipal and investment-grade corporate bonds. It seems TD will continue to make strategic acquisitions moving forward.
Prospering fertilizer space
Nutrien in the agricultural sector is the 15th-largest publicly listed company on the TSX with its $40.12 billion market cap. The company from Saskatoon provides crop inputs, services, and solutions to customers in the home country, Australia, South America, and the United States.
Currently, Nutrien distributes a wide range of products and services to seven countries. Its top produce includes nitrogen, phosphate, and potash products for agricultural, industrial, and feed customers. The total volume is more than 25 million tons.
Nutrien is the world’s largest potash producer. The production capacity of its six mines in Saskatchewan, all low cost, is over 20 million tons of potash. Growers worldwide patronize this Canadian agri-giant because of its complete agriculture solutions. The compelling reason to invest in Nutrien is that the fertilizer space is a prospering industry.
Agriculture experts anticipate demand for fertilizers to rise in the near term. Furthermore, higher domestic and overseas demand for potash should result in robust sales volume in 2021. Nutrien should also benefit from a stronger Canadian dollar. At the current share price of $70.42 per share, the dividend yield is 3.32%.
Excellent buying opportunities
One year has passed since the global pandemic unsettled stock markets worldwide. COVID-19 and its new variants continue to threaten economies and stall recovery. Fortunately, two TSX giants are displaying resiliency amid the uncertainties. Both stocks are excellent buying opportunities for income investors.
Speaking of two Canadian giants that have risen 15% and are outperforming the TSX in 2021...
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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 Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends Nutrien Ltd.