The stock market grows over time — but not without its value changing due to daily or monthly fluctuations. However, despite the market’s unpredictable behaviour, buying opportunities abound. Canadians can scoop three great value stocks on the TSX that could make them richer, slowly but surely.
Impressive financial performance
One of the best choices today is a $1.72 billion multinational grocery and retail company. The North West Company (TSX:NWC) is the dominant provider of everyday products in Canada’s western provinces and northern territories. Likewise, this former fur trading company has a captured market in Alaska, Hawaii, and U.S. territories in Oceania as well as the Caribbean.
Believe it or not, this consumer-defensive stock’s total return in the last 20 years is 6,170.38% (22.96% CAGR). The current share price is $35.40 (+10.23% year-to-date), while the dividend yield is 4.04%. Market analysts recommend a buy rating and forecast the price to climb 18.33% to $41.89 in the next 12 months.
NWC President and CEO Edward Kennedy describes 2020 as the most intensely active and reactive year in the company’s history. In the full year 2020 (year ended January 31, 2021), earnings results were stellar. Total sales and net earnings grew by 12.65% and 66.40% versus 2019. Management expects 2021 earnings to be meaningfully above the pre-pandemic (2019) levels.
Tecsys Inc. (TSX:TCS) could be the next tech superstar on the TSX. The $652.66 million Montreal, Canada-based company develops, markets, and sells supply chain management software. It serves more than 1,000 customers in Canada and 14 other countries. The goal is to help good and industry-leading organizations achieve supply chain greatness.
This $652.66 million tech firm primarily serves third-party logistics, healthcare systems, retail, services parts, and general wholesale distribution industries. The Tecsys Itopia solution is perhaps the industry’s most dynamic and powerful engine for supply chain business. It connects customers and suppliers as one borderless enterprise.
In Q3 fiscal 2021 (quarter ended January 31, 2021), total revenue grew 19% versus the same period in fiscal 2020. Meanwhile, the reported comprehensive income for the quarter was 86.67% better year-over-year. While the stock is underperforming in 2021 (-9.31%), market analysts forecast the price to soar 55.14%, from $45.12 to $70, in the next 12 months. Tecsys pays also pays a modest 0.58% dividend.
Hardwoods Distribution Inc. (TSX:HDI) flies under the radar, although it’s one of the better performers thus far in 2021. The industrial stock outperforms the TSX, +41.35% versus +9.61%. Also, at $35.54 per share, would-be investors can partake of the 1.13% dividend. Analysts covering Hardwood Distribution see a potential 18.18% upside to $42 in the next 12 months.
The $754.92 million company from Langley, Canada, is a world-class distributor of architectural building products. In North America, it operates under multiple brands (three industry-leading distribution brands). However, 90% of the business is in the United States. Hardwoods generate more than $1.2 billion in annual revenues.
Management is proud to report record-setting results in 2020 despite the global pandemic. First up was the 6.26% sales growth that resulted in an all-time high of $1,245.3 million. The gross profit margin percentage of 19.2% was also a record (18.1% in 2019). Harwood’s profit in 2020 was 27.12% higher than in 2019.
Value investors shouldn’t miss including Hardwoods Distribution or the North West Company and Tecsys in their shopping lists for Q2 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 owns shares of and recommends Tecsys Inc. The Motley Fool recommends HARDWOODS DISTRIBUTION INC.