Despite rising volatility, I expect the uptrend in the Canadian equity markets to continue amid demand recovery and improvement in corporate earnings. So, here are four top Canadian stocks you can buy right now to earn superior returns this year.
Nuvei (TSX:NVEI) is a global payment technology partner, which operates across 200 markets and supports 455 different payment modes. Its proprietary platform allows its partners and merchants to accept payments in over 150 currencies and 40 cryptocurrencies securely. Supported by its product offerings and capabilities, the company had reported an impressive fourth-quarter performance. Its top line grew over 40%, while its adjusted EBITDA grew more than 50%.
Nuvei’s strong performance has boosted its stock price, which trades over 160% higher since going public in September 2020. Meanwhile, I believe the uptrend in the company’s stock price to continue given the structural shift towards online shopping and its significant exposure to the iGaming and sports betting industry, which offers high-growth prospects amid increased legalization. The company is also working on closing the acquisition of Mazooma Technical Service, a U.S.-focused sports betting, payment platform provider.
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goeasy (TSX:GSY) has delivered a substantial performance over the last 20 years, with its normalized diluted EPS growing at a CAGR of 24.9%. Supported by its strong fundamentals, the company has returned close to 1,600% over the last 10 years. Despite its impressive stock price growth, the company is still trading at an attractive valuation, with its forward price-to-earnings ratio standing at 15.1.
Amid the improvement in economic activities and economic expansion, the demand for the company’s services could rise going forward. Meanwhile, through its wide range of financial products, omnichannel distribution model, and increased penetration, the company is well equipped to benefit from the expanding addressable market. The recent acquisition of LendCare Holdings has expanded its product range and added new industry verticals. So, given its high-growth prospects and attractive valuation, I expect goeasy to deliver superior returns this year.
The passenger airline industry is going through a challenging period amid the pandemic-infused travel restrictions. Air Canada (TSX:AC), the largest airline in Canada, has also felt the brunt, with its 2020 net losses coming at $4.65 billion while burning $4.67 billion of net cash. Higher net losses and rising debt levels have weighed heavily on its stock price, which is down 49% from its January 2020 levels.
Despite the near-term weakness, the company’s long-term outlook looks healthy. The widespread vaccination could allow the government to lift some of the harsh restrictions, boosting passenger demand. The company is also looking at expanding its cargo vertical to meet the increased demand.
Meanwhile, the financial support of $5.9 billion from the government has strengthened its balance sheet. Further, the company’s cost-cutting initiatives could lower its losses in the near term. Given its scale and strong balance sheet, I believe Air Canada could bounce back strongly in the second half of this year.
The final pick on my list is Suncor Energy (TSX:SU)(NYSE:SU), which had reported an impressive first-quarter performance on Monday, outperforming analysts’ expectations. Its net earnings came in at $821 million against analysts’ expectation of $232 million and a significant improvement from a net loss of $3.5 billion in the previous year’s quarter. The increased production and higher oil prices boosted the company’s financials.
Oil prices have bounced back strongly, with West Texas Intermediate (WTI) oil trading above $65 per barrel. Industry experts project oil prices to remain at elevated levels for the rest of this year amid improvement in economic activities. Further, its production is expected to rise this year, while its operating expenses could fall. So, higher oil prices and improvement in operating metrics could drive the company’s earnings, boosting its stock price.
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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 Rajiv Nanjapla has no position in any of the stocks mentioned.