4 Top Canadian Stocks to Buy Today With $1,000

These four Canadian stocks can outperform broader equity markets this year. Here’s why.

| More on:
man sitting in front of 3 screens programming

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

Despite the rising COVID-19 cases, the Canadian equity markets have remained strong, with the S&P/TSX Composite Index trading over 10% higher for this year. The expectation of more fiscal stimulus and expansion of vaccination drive has increased investors’ confidence, driving the markets higher. Amid investors’ optimism, here are four Canadian stocks that can deliver superior returns this year.

Lightspeed POS

Despite the reopening of the economy, the demand for Lightspeed POS (TSX:LSPD)(NYSE:LSPD) could sustain, given the secular shift towards online shopping and the adoption of omnichannel solutions by small- and medium-scale retailers. Further, the company’s focus on developing innovative products, an aggressive acquisition strategy, and a strong customer base augur well with its growth prospects.

Lightspeed POS is looking at opportunist acquisitions, increasing its customer base, raising its market shares, and providing access to newer markets. Since May 2019, the company has completed seven acquisitions. Further, the company had raised around US$676 million through new equity offerings in February. The proceeds could fund its growth initiatives and also its future acquisitions. Given its healthy growth prospects and with its stock price trading over 15% lower than its 52-week high, I believe Lightspeed POS could deliver superior returns this year.

goeasy

My second pick would be goeasy (TSX:GSY), which is trading close to 43% higher for this year, comfortably outperforming the broader equity markets. Meanwhile, it has delivered impressive returns of over 555% from its last year’s March lows. Despite the massive surge, the company’s valuation remains attractive, with its forward price-to-sales and forward price-to-earnings multiples at 2.7 and 15.5, respectively.

The underserved sub-prime market, along with demand recovery and economic expansion, offers robust growth prospects. Meanwhile, the company is looking at launching new products and penetrating new markets to capture the expanding addressable market. The company’s management has also set upbeat guidance for the next three years. The company also pays quarterly dividends, with its forward dividend yield standing at 1.9%.

Magna International

Third on my list is Magna International (TSX:MG)(NYSE:MGA), which is trading over 30% higher for this year, comfortably outperforming the broader equity markets. Its impressive fourth-quarter performance and promising guidance for the next three years have driven its stock price higher. However, I believe the uptrend could continue, given its attractive valuation and exposure to the electric vehicle (EV) market that offer robust growth prospects.

Amid the growing global shift toward vehicle electrification, its joint ventures with Beijing Electric Vehicle Company and LG Electronics have become vital. Meanwhile, the company’s management expects that 50% of its production would be for EVs by 2023. Further, it could also benefit from the entry of tech giants, such as Apple and Google, into the EV market.

Suncor Energy

My final pick on this list would be Suncor Energy (TSX:SU)(NYSE:SU), which is trading at a significant discount from its January 2020 levels. Its valuation also looks attractive, with its price-to-book and forward price-to-earnings multiples standing at 1.1 and 15.9, respectively. The reopening of the economy and economic expansion could drive the oil demand and prices higher.

Meanwhile, the company’s management had projected to break even at WTI crude trading around US$35 per barrel. With oil prices trading considerably higher than those levels, I expect Suncor Energy to deliver strong performance in the coming quarters. Further, the company’s management expects its production and refinery utilization rate to improve this year while operating expenses could fall.

So, given its attractive valuation, higher oil prices, and improving operating metrics, I believe Suncor Energy could deliver superior returns this year.

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.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. David Gardner owns shares of Alphabet (A shares), Alphabet (C shares), and Apple. Tom Gardner owns shares of Alphabet (A shares) and Alphabet (C shares). The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Apple. The Motley Fool owns shares of Lightspeed POS Inc. The Motley Fool recommends Magna Int’l and recommends the following options: short March 2023 $130 calls on Apple and long March 2023 $120 calls on Apple. Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned.

More on Energy Stocks

Super sized rock trucks take a load of platinum rich rock into the crusher.
Energy Stocks

3 Top Commodity Stocks for Passive Dividend Income

Commodity stocks like Cameco Corp (TSX:CCO)(NYSE:CCJ) offer dividend income.

Read more »

Group of industrial workers in a refinery - oil processing equipment and machinery
Energy Stocks

2 Oil Stocks Under $11 With 90-110% Gains So Far This Year

Two small-cap oil stocks with enormous gains year to date are likely to deliver far superior returns in 2022 versus…

Read more »

Group of industrial workers in a refinery - oil processing equipment and machinery
Energy Stocks

Suncor Energy (TSX:SU) Could Power Your Portfolio to New Highs

Suncor Energy (TSX:SU)(NYSE:SU) is a cheap stock that could unlock value for its longer-term shareholders.

Read more »

TSX Today
Energy Stocks

TSX Today: What to Watch for in Stocks on Thursday, August 11

Rising commodity prices could take energy and mining shares on the TSX higher at the open today.

Read more »

Oil pumps against sunset
Energy Stocks

2 Top Canadian Energy Stocks to Buy Offering Dividend Yields Above 6%

These two top Canadian energy stocks are excellent long-term investments and offer unbelievable dividend yields if you buy them today.

Read more »

energy industry
Energy Stocks

Oil Price: Should You Buy Suncor (TSX:SU) or Canadian Natural Resources (TSX:CNQ) Stock?

Energy stocks are down from the 2022 highs. Investors can now get high dividend yields for Suncor and Canadian Natural…

Read more »

Illustration of bull and bear
Energy Stocks

What’s Next for TSX Energy Stocks as Bears Dominate?

Since June, TSX energy stocks have lost 25% on average, notably underperforming broad market indices.

Read more »

Oil pumps against sunset
Energy Stocks

For the 7th Time in Under 2 Years, Freehold Royalties Stock Increases its Dividend

After another record quarter generating funds from operations, Freehold Royalties stock just increased its dividend again!

Read more »