Got $500? 2 Under-$30 Stocks to Buy for June 2021

Air Canada and Barrick Gold are two TSX stocks that can beat the broader markets in 2021.

| More on:
A close up image of Canadian $20 Dollar bills

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

One way to benefit from equity investing is by having a disciplined approach. You need to allocate a portion of your savings each month to buy quality stocks trading at a discount. For example, the TFSA (Tax-Free Savings Account) contribution room for 2021 is $6,000. It makes sense to invest $500 each month and benefit from dollar-cost averaging instead of allocating the entire sum of $6,000 in one go.

So, where should you invest $500 today? We’ll take a look at two TSX stocks that should be on the radar of investors, as they have the potential to outpace the broader market in 2021 and beyond.

Barrick Gold

The first stock on my list is Barrick Gold (TSX:ABX)(NYSE:GOLD). A precious metals mining company, Barrick Gold, is down marginally year to date. However, the current uptick in gold prices warrants a closer look towards the stock, which is currently trading at $28.8.

In Q1, Barrick Gold reported an operating cash flow of US$1.4 billion and a free cash flow of $800 million. Its copper revenue soared 31% year over year, while its net cash was up US$500 million. This allowed the company to announce a quarterly dividend of US$0.09 per share and a capital-distribution program totaling US$750 million in 2021.

Barrick Gold is valued at a market cap of US$51 billion. Wall Street expects the company’s sales to decline by 2.7% to US$12.25 billion in 2021 and rise by 1.2% to US$12.39 billion in 2022. Analysts also expect earnings to rise at an annual rate of 6% in the next two years. The 12-month average price target of Barrick Gold stock is US$29.5, which is 20% higher than its current trading price.

Air Canada

The airline industry is expected to recover in the second half of 2021, making stocks such as Air Canada (TSX:AC) the perfect contrarian bet. Air Canada stock is down 47% from record highs, and while air traffic might not reach pre-COVID-19 levels in the next two years, airline stocks should gain momentum on the back of improving profit margins and rising revenue.

The rollout of vaccinations is picking up speed in most developed countries, which will be a key driver for Air Canada stock and peers. The COVID-19 pandemic decimated the capital-intensive airline industry, as Air Canada sales fell from $19 billion in 2019 to less than $6 billion in 2020. In the last four quarters, Air Canada’s revenue was even lower at $2.84 billion.

While Bay Street expects Air Canada’s sales to rise by 9% to $6.35 billion this year, it might more than double to $14 billion in 2022. This will allow the company to improve its bottom line from a loss per share of $14.96 in 2020 to a loss of $0.12 per share in 2022.

The Foolish takeaway

These are just two examples of TSX stocks that might gain momentum in June and end the year at a higher price. The article should be viewed as a starting point in your investment journey, helping you to identify similar stocks that are on the cusp of a turnaround.

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 Aditya Raghunath has no position in any of the stocks mentioned.

More on Investing

edit Sale sign, value, discount
Investing

3 Cheap TSX Stocks to Buy Before July

Canadian markets have bounced back, but investors can still snag undervalued TSX stocks like Finning International Inc. (TSX:FTT).

Read more »

thinking
Investing

Is Blackline (TSX:BLN) Stock Worth Your Attention in 2022?

Blackline Safety Corp. (TSX:BLN) stock has struggled in the year-over-year period, but there are some positives to glean from its…

Read more »

stock analysis
Investing

Why I’m Buying the Dip in Andlauer (TSX:AND) Stock

Andlauer Healthcare Group Inc. (TSX:AND) stock offered exposure to two promising spaces while offering solid value in late June.

Read more »

clock time
Tech Stocks

Now’s the Time to Load Up the TFSA With These 2 Top TSX Stocks

Here are two top TSX stocks that long-term growth investors may not want to give up on, especially at these…

Read more »

data analyze research
Energy Stocks

TSX Stock Picks With Huge Potential

If you want a TSX stock that's bound for even more strong growth, these three are top picks by analysts.

Read more »

growing plant shoots on stacked coins
Investing

Market Plunge: Double Your Cash With 3 Bargain Stocks

These TSX stocks have corrected over 50%, despite their strong fundamentals, and could easily double from here.

Read more »

oil and natural gas
Energy Stocks

Can Cenovus Stock Outperform in H2 2022?

Is now the time for investors in Cenovus (TSX:CVE)(NYSE:CVE) stock to buy more, or wait out this volatility right now?

Read more »

cup of cappuccino with a sad face
Investing

The Biggest Regret a TSX Investor Can Have

Hydro One (TSX:H) is a top bond proxy to own if you're a TSX investor who's worried about a pick-up…

Read more »