4 Top TSX Stocks to Outperform the Benchmark Index in 2021

Despite the uncertainty and near-term volatility, these four TSX stocks are likely to deliver stellar returns and outperform the benchmark index significantly.

| More on:
stocks rising

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 uncertainty and near-term volatility, a few TSX listed stocks are likely to deliver stellar returns and outperform the benchmark index significantly. Here’s the list of four TSX stocks that I believe could handily beat the broader markets with their returns in 2021. 

The economic expansion and recovery in consumer demand will likely boost these stocks and drive them higher. 


goeasy (TSX:GSY) has consistently made its investors rich. Its stock has appreciated by about 2,134% in the past 10 years. Meanwhile, it has surged nearly 51% this year. Besides stock price appreciation, goeasy has boosted its shareholders’ returns by increasing its dividends at a solid double-digit rate in the last seven years. 

Its stellar financial performance backs the astounding growth in its stock price and its solid dividend payments. Notably, goeasy’s revenues and earnings have grown at a breakneck pace over the past two decades. Further, the economic expansion, increase in its loan portfolio, growing secured loans, product and channel expansion, and a large non-prime lending market suggests that goeasy’s top and bottom line could continue to rise at a high double-digit rate, which, in turn, is expected to support the uptrend in its stock and drive its future dividends. 

Bank of Montreal

Bank of Montreal (TSX:BMO)(NYSE:BMO) has impressed with its stellar financial performance in the last two quarters, and I expect the momentum in its business to sustain in 2021 and beyond. Bank of Montreal’s loans and deposits volumes are growing at a healthy pace. Meanwhile, its diversified revenue sources suggest that the bank is set to deliver solid top-line growth in 2021.  

While its top line is expected to show improvement, operating leverage and a significant decline in the credit provisions are likely to drive its profitability and future dividend payments. Furthermore, Bank of Montreal is trading at a discount to peers, indicating further upside to its stock

Absolute Software 

Absolute Software (TSX:ABST)(NASDAQ:ABST) stock is up about 19% year to date, and I see further upside owing to its attractive valuation, favourable industry trends, and its large addressable market. I expect the spending on cybersecurity threats to continue to increase in the future, driving higher demand for Absolute Software’s endpoint security products. 

Absolute Software’s annual recurring revenues are growing at a breakneck pace. Meanwhile, its robust new product pipeline, zero-debt balance sheet, customer growth, and high retention rate suggest that Absolute Software could continue to deliver strong financial results in the coming years. It faces low direct competitive activities, which is a positive. Meanwhile, its stock trades cheaper than peers at current levels. 

Suncor Energy

Suncor Energy (TSX:SU)(NYSE:SU) is expected to gain big from the higher crude oil prices and improving demand. The crude prices could continue to trade higher in 2021, despite the upward pricing pressure, providing a solid base for growth. 

I believe Suncor’s integrated assets, higher production volumes, and increased average realized prices are likely to drive its revenues and earnings. Meanwhile, Suncor’s lower cost base is expected to cushion its earnings. Suncor could enhance its shareholders’ returns through share buybacks. Further, I expect the company to announce a hike in its dividends soon. Its stock is still trading cheap compared to the pre-COVID levels and offers a yield of 3.3%. 

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 Sneha Nahata has no position in any of the stocks mentioned.

More on Bank Stocks

A person builds a rock tower on a beach.
Dividend Stocks

Change Your Future: What to Hold in a TFSA in 2022

Holding dividend growth stocks in a TFSA long-term can change the financial futures of worried Canadians.

Read more »

work from home
Bank Stocks

Where Should Canadians Invest $500 Right Now? How About the “Best Bank for Your Buck?”

TD Bank (TSX:TD)(NYSE:TD) stock is a Dividend Aristocrat that looks too cheap to ignore as rates surge.

Read more »

Money growing in soil , Business success concept.
Dividend Stocks

Got $4,000? 4 Simple TSX Stocks to Buy Right Now

The macroeconomic environment is tense but investing can be simple. Here are four stocks to buy now and book your…

Read more »

Growth from coins
Dividend Stocks

What’s More Effective: 1 Growth Stock or 1 Dividend Stock for High Returns?

Let's settle the age old debate. If you had invested in a huge growth stock or a solid dividend stock,…

Read more »

Bank sign on traditional europe building facade
Bank Stocks

Why I Prefer Banks to Oil Stocks for 2022’s 2nd Half

Right now, I like bank stocks like Toronto-Dominion Bank (TSX:TD)(NYSE:TD) more than oil stocks.

Read more »

edit Four girl friends withdrawing money from credit card at ATM
Stocks for Beginners

2 Big Bank Stocks to Own for Lifelong Income

These two Big Bank stocks are ideal staple holdings for newbie investors seeking a lifetime of passive income.

Read more »

Dial moving from 4G to 5G
Tech Stocks

TFSA Investors: 2 Canadian Stocks With Unbelievable Staying Power 

Amid economic uncertainty, investors look for stocks that can thrive in any crisis and grow long term. Here are two…

Read more »

Happy Retirement” on a road
Bank Stocks

Got $10? You Can Still Reach Riches for Retirement

You could have six figures by retirement by simply choosing a strong, safe stock that's down and putting aside $10…

Read more »