If you have been out of the markets during the recent rally, you still have not missed the bus. TSX stocks will likely continue to trade strong amid the economic recovery and better quarterly earnings. Here are three names among them that offer decent growth prospects for the long term.
B2Gold
One of the top gold miner stocks B2Gold (TSX: BTO)(NYSEMKT: BTG) started seeing some recovery lately. After months-long weakness, the stock has soared more than 20% in Q2 2021. Notably, the rally could continue mainly because of the positive outlook for the yellow metal and BTO’s discounted valuation.
B2Gold reported its Q1 earnings early this month. While its revenues fell 5% year over year on lower production, its net earnings soared a handsome 28%. The miner reported higher all-in sustaining costs during the quarter, which weighed on its profit margins.
However, higher metal prices in Q2 and higher production could bode well for its earnings growth. Interestingly, BTO stock is currently trading 10 times its earnings. This looks far lower compared to peers and its historical average valuation. If the yellow metal continues its march upwards BTO’s discounted valuation will likely drive the stock further higher.
Whitecap Resources
Energy stocks have seen a handsome rally recently on a positive outlook for the sector. Whitecap Resources (TSX: WCP) is certainly one of them. A $3.5 billion oil and gas company stock is up 150% in the last six months. Notably, its Q1 2021 earnings and recently completed acquisitions could accelerate the stock’s rally.
Whitecap Resources reported a 30% increase in production in Q1 after completing acquisitions of NAL Resources and TORC Oil & Gas. It reported a revenue increase of 74% in Q1 2021 and a profit of $20 million against a loss in the same quarter last year.
On May 17, the company announced the completion of Kicking Horse Oil & Gas. Driven by strong operations performance, Whitecap announced a monthly dividend increase of 8%. It will now pay a dividend of $0.195 per share for 2021, indicating an annualized yield of 3.3%.
Higher production and a stronger balance sheet make Whitecap Resources an interesting name in the energy space. Driven by rising crude oil prices and a rosy outlook for the sector, it offers an appealing total return potential for long-term investors.
TC Energy
If you’re looking for a stock with handsome, reliable dividends, consider TC Energy (TSX: TRP)(NYSE: TRP). It yields 5.6%, which is notably higher than TSX stocks at large. It has delivered an average annual total return of 12% in the last two decades. In comparison, the TSX Composite Index has delivered an average return of 4% in the same period.
TC Energy operates energy pipelines, storage facilities, and power plants in Canada, the U.S., and Mexico. Approximately 95% of its earnings come from rate-regulated assets or long-term contracts. This minimizes investor risk to a large extent and facilitates earnings and dividend stability.
The company aims to invest $20 billion in capital projects through 2024. Its visible earnings growth and reliable dividend growth make it an attractive investment proposition for long-term investors.
