The second quarter of 2021 is perhaps the most conducive period to invest if you’re a value investor. More or less, you can see the growth potential of select stocks after one quarter. Three names from different sectors are well positioned to deliver superior returns by year-end.
Growth is coming
Inter Pipeline (TSX:IPL) is a surprise package, given the energy sector’s slump during the COVID year. The sector is overwhelmingly ahead of the TSX (+7.30%) and the technology sector (-0.29%) with its 29.22% year-to-date gain. Meanwhile, Inter Pipeline is up 53.54%.
The energy stock’s 1,177.04% (13.57% CAGR) total return over the last 20 years is mighty impressive. Today, Inter Pipeline owns an extensive energy infrastructure base and has cemented its footprint in six countries. The company is also the first Canadian firm to develop an integrated propane dehydrogenation and polypropylene facility.
The Heartland Petrochemical Complex (HPC) in Alberta will begin producing Canadian-made polypropylene resin by early 2022. It should be Inter Pipeline’s growth catalyst and driver in the coming years.
Empire Company (TSX:EMP.A) is an ideal pick for risk-averse investors, especially during recessionary environments. This $10.63 billion iconic food retailer in Canada has proven once more its resiliency amid the pandemic. Investors are winning by 13.95% year to date and enjoying a modest 1.31% dividend.
Like Inter Pipeline, the overall return (928.57%) of Canada’s second-largest grocery retailer over the last two decades is incredible. If you were to invest in this consumer-defensive stock today, the share price is $39.50. Based on analysts’ forecasts, it could climb to 22% to $48 in the next 12 months.
Empire is joining forces with Food, Health & Consumer Products of Canada (FHCP) to spearhead the “Grocery Supply Code of Practice for Canada” proposal. The company and FHCP encourage other grocers, suppliers, and industry stakeholders to support this meaningful endeavour and provide valuable inputs into this proposal.
The Sobeys parent company will buy a majority stake in supermarket chain Longo’s, including its e-commerce business Grocery Gateway. The strategic move indicates that Canada’s grocery retail landscape is consolidating. Also, the deal enables Empire to expand its reach further in the southwestern Ontario market.
The cannabis sector has been out of the limelight for a couple of years now, although Organigram Holdings (TSX:OGI)(NASDAQ:OGI) deserves a second look in 2021. The $1.26 billion company from Moncton is a leading Canadian licensed producer of high-quality cannabis plus cannabis-derived products.
Organigram trades at only $4.30 per share, although the price a year ago was only $2.85. Current investors are happy with the 154.44% year-to-date gain. Things should be looking up following British American Tobacco’s $221 million investment in the Canadian marijuana company.
The two companies have a product development collaboration agreement in place. After creating of a Center of Excellence, the partners will work together to develop the next generation of cannabis products, CBD-focused initially. A steering committee will govern and supervise the centre. Each company will contribute scientists, researchers, and product developers.
Top Q2 attractions
Inter Pipeline, Empire, and Organigram are sure to attract value investors in the second quarter of 2021. You can take positions, too, before the prices shoot through the roof.
Speaking of three top TSX value stocks to buy in Q2 2021...
Motley Fool Canada's market-beating team has just released a brand-new FREE report revealing 5 "dirt cheap" stocks that you can buy today for under $49 a share.
Our team thinks these 5 stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune.
Don't miss out! Simply click the link below to grab your free copy and discover all 5 of these stocks now.
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 owns shares of and recommends OrganiGram Holdings. The Motley Fool recommends OrganiGram Holdings.