3 of the Best TSX Stocks to Buy in May 2021

Don’t let the volatility stop you from investing today. Here are three Canadian stocks that should be at the top of your watch list.

| More on:
analyze data

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

The high levels of volatility don’t seem to be slowing down the Canadian stock market. Investors are witnessing a steep sell-off in several sectors, but the broader is continuing to set new all-time highs. Year to date, the S&P/TSX Composite Index is up more than 10% already.

Short-term investors may not be thrilled with the volatility. Long-term investors, though, have been presented with lots of excellent buying opportunities. 

If you’ve got a time horizon of five years or more with cash ready to put to work, here’s a list of three Canadian companies that should be on your radar. All three companies vary considerably, so there’s no harm in adding all of them to your portfolio today.

Toronto-Dominion Bank

There’s a lot to like about the Canadian banks right now. After a rough 2020, a renewed interest in value investing this year has sent the major Canadian banks soaring. 

I don’t think you can go wrong starting a position in any of the Big Five today. They are all very reasonably priced, own top dividends, and hold the potential to drive market-beating growth over the long term. 

Toronto-Dominion Bank (TSX:TD)(NYSE:TD) is at the top of my watch list right now. Shares are up a market-beating 20% year to date and the stock is still managing to yield 3.6%. 

The $160 billion bank is acting like a growth stock this year, but growth isn’t the main reason it’s at the top of my watch list. TD’s exposure to the U.S. economy is what separates it from its peers for me. One-third of the bank’s net income is driven by its U.S. operations, and there are still plenty of opportunities to expand through the West Coast.

While TD likely won’t be the fastest-growing stock in your portfolio, that’s okay. The bank will provide your portfolio with stability, a top dividend yield, and market-beating growth potential over the long term. 

goeasy

goeasy (TSX:GSY) has been one of the top Canadian stocks over the past five years. Shares are up a market-crushing 650% since 2016. 

The growth doesn’t seem to be slowing down, either. The stock rebounded extremely well from the COVID-19 market crash, posting a gain of more than 200% over the past year. 

It’s been a great run for goeasy, but I wouldn’t try to time the market and wait for a dip to start a position. Even after an incredible run over the past 12 months, I think the growth stock is on the cusp of another breakout. 

A rise in consumer spending could lead to a rise in demand for goeasy’s services. Home, auto, and personal loans are three areas that goeasy supports its customers, all of which could see boosted demand as the country reopens and consumers increase their discretionary spending. 

Brookfield Infrastructure Partners

The third stock on my list offers investors a mix of TD Bank’s and goeasy’s characteristics. Brookfield Infrastructure Partners (TSX:BIP.UN)(NYSE:BIP) generates passive income through a near-4% dividend yield, has a solid market-beating track record, and can compete with utility stocks when it comes to stability.

The $18 billion company is a subsidiary of Brookfield Asset Management. That alone provides investors with an added incentive to pick up shares of the infrastructure company.   

The reason why Brookfield Infrastructure Partners is as dependable as a utility stock is due to its broad diversification. It owns and operates all kinds of different businesses, including utility companies. In addition, it has operations spread across the globe.  

Don’t let the broad diversification fool you into thinking that the stock can’t deliver market-beating growth, though. Shares are up an impressive 80% over the past five years. That’s good enough for just about doubling the returns of the Canadian market.

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 Nicholas Dobroruka has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Brookfield Asset Management. The Motley Fool recommends Brookfield Asset Management Inc. CL.A LV, BROOKFIELD INFRA PARTNERS LP UNITS, and Brookfield Infrastructure Partners.

More on Bank Stocks

question marks written reminders tickets
Bank Stocks

Are Canadian Bank Stocks Oversold?

Canadian bank stocks are down more than 20% from the 2022 highs. Is this a good time to buy?

Read more »

money cash dividends
Bank Stocks

Market Selloff: Time to Hold Financial Stocks

Income investors should consider holding financial stocks for dividend safety in this period of uncertainty.

Read more »

Man holding magnifying glass over a document
Bank Stocks

TD Bank Stock Looks Severely Undervalued Going Into the 2nd Half of 2022

TD Bank (TSX:TD)(NYSE:TD) stock has been under pressure amid the TSX Index correction but may be among the best bounce-back…

Read more »

Coworkers standing near a wall
Bank Stocks

Policy Rate: 2 More Hikes After July 2022 to Reach Neutral Level

The Bank of Canada might need three more rate hikes beginning in July 2022 to reach neutral levels.

Read more »

You Should Know This
Bank Stocks

75-Basis-Point Rate Hike? Here’s What it Means for Stocks

Aggressive rate increases dampen investors’ sentiment and send share prices tumbling, because the hikes can impact corporate earnings or profits.

Read more »

You Should Know This
Bank Stocks

TD Bank Stock Faces Challenge From U.S. Senate!

Toronto-Dominion Bank's (TSX:TD)(NYSE:TD) latest deal is being blocked by the U.S. Senate.

Read more »

question marks written reminders tickets
Bank Stocks

Is TD Bank (TSX:TD) or Royal Bank (TSX:RY) Stock a Buy?

Canadian banks appear oversold. Is this the right time to buy TD or Royal Bank stock?

Read more »

edit Close-up Of A Piggybank With Eyeglasses And Calculator On Desk
Bank Stocks

2 Top TSX Financial Stocks to Buy for a Retirement Fund During the Market Correction

These top TSX financial stocks now look oversold for a self-directed TFSA or RRSP portfolio.

Read more »