3 Top TSX Value Stocks to Buy Now

Value investors are sure to scout for the best buys in the second quarter of 2021. Inter Pipeline stock, Empire stock, and Organigram stock are the standout picks because of their growth potential.

| More on:
value for money

Image source: Getty Images

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 expansion

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.

Greener pasture

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.

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.

More on Dividend Stocks

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

5 Canadian Stocks to Buy and Hold Forever in Your TFSA

Investing in stocks is not always about timing but about holding. Instead of looking at the price, look at the…

Read more »

Arrowings ascending on a chalkboard
Dividend Stocks

The 5.5% Dividend Stock Set to Dominate the TSX

TD Bank (TSX:TD) stock looks severely undervalued while the yield is around 5.5%.

Read more »

protect, safe, trust
Dividend Stocks

Passive Income: How to Earn Safe Dividends With Just $10,000

These three dividend stocks with resilient business models and a growing earnings base can provide durable passive income.

Read more »

Printing canadian dollar bills on a print machine
Dividend Stocks

How to Use Your TFSA to Earn $34,150 Per Year in Tax-Free Income

Canadian investors can hold undervalued TSX dividend stocks in a TFSA and benefit from outsized gains 2024 and beyond.

Read more »

Target. Stand out from the crowd
Dividend Stocks

3 Monthly-Paying Dividend Stocks That Are Screaming Buys Right Now

These three monthly-paying dividend stocks are excellent additions to your portfolios.

Read more »

Growing plant shoots on coins
Dividend Stocks

TFSA Set and Forget: 1 Dividend-Growth Superstar for the Long Run

Manulife Financial (TSX:MFC) stock is in the zone, with dividend hikes and big buybacks likely in the cards.

Read more »

little girl in pilot costume playing and dreaming of flying over the sky
Dividend Stocks

For a Shot at $6,228/Year in Passive Income, Buy 755 Shares of This TSX Stock

Looking for passive income? You'll need to look beyond only dividends. Which is why EIF stock could be one of…

Read more »

Piggy bank with word TFSA for tax-free savings accounts.
Dividend Stocks

TFSA Investors: 2 Dividend Stocks I’d Buy and Hold Forever

These two stocks could provide long-term investors multi-year returns of more or less 10% per year

Read more »