Yesterday, the Canadian benchmark index, the S&P/TSX Composite Index, hit a 20,000 mark for the first time before closing at 19,976.01, representing an increase of 14.6% for this year. Higher commodity prices, improving corporate earnings, and gradual reopening of the economy appear to have increased investors’ confidence, driving the equity markets higher. Amid increased investors’ confidence, here are four top Canadian stocks that you can buy right now for superior returns.
Boosted by improving oil prices and solid first-quarter performance, Suncor Energy (TSX:SU)(NYSE:SU) has increased by 38.4% this year. Despite the substantial rise, the company still trades significantly lower from its January 2020 levels, while its valuation looks attractive. Its price-to-book and forward price-to-earnings multiples currently stand at 1.2 and 16.3, respectively.
Meanwhile, oil prices could remain at elevated levels for the rest of this year amid the rising demand due to the reopening of economies and economic expansion. The company expects its oil production and refinery utilization rate to improve this year, while its expenses could go down amid several cost-cutting initiatives. Further, the company is lowering its debt levels and rewarding its shareholders through dividends and share repurchases. So, I expect the uptrend in Suncor Energy’s stock price to continue.
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After a selloff last year, Cineplex (TSX:CGX) has witnessed a strong buying this year, with its stock price rising by 71.5%. However, the company still trades over 50% lower than its January 2020 levels, providing an excellent buying opportunity amid the gradual reopening of the economy. Canadian provinces are planning for phased reopening amid widening vaccination and falling COVID-19 infections.
The reopening of entertainment venues and movie theatres could improve theatre attendance, thus delivering a sequential improvement in its financials. Besides, the company has taken several cost-cutting initiatives and strengthened its balance sheet by raising additional funds, which are encouraging. Its valuation also looks attractive, with its forward price-to-sales multiple standing at 0.9.
BlackBerry (TSX:BB)(NYSE:BB) had a very volatile first quarter, as it became Reddit users’ target. However, the company has witnessed a strong buying this quarter, with its stock price rising by 32%. Meanwhile, I expect the uptrend in its stock price to continue, given its high growth prospects.
The rising cybersecurity spending could benefit BlackBerry, which specializes in endpoint security management. It recently partnered with IBM to expand its product reach across Canada. The company also offers embedded solutions to automotive companies. Amid the autonomous vehicle market growth, the demand for BlackBerry’s products and services could rise in the coming quarters. Further, its partnership with Amazon Web Services and Baidu could strengthen its position in the growing electric and autonomous vehicle market.
Supported by its solid first-quarter performance and accretive acquisition of Handicare, Savaria (TSX:SIS) is trading 32.8% higher for this year. Meanwhile, I expect the uptrend to continue. Amid the aging population and rising income, the demand for accessibility solutions could increase in the coming years, benefiting the company.
Handicare has four manufacturing facilities across North America, Asia, and Europe while earning 89% of its revenue from Europe. So, the acquisition could significantly expand Savaria’s distribution network outside North America. Further, the acquisition could lead to product innovation and improve production efficiency while offering cross-selling opportunities. So, the company’s growth prospects look healthy. The company’s valuation also looks attractive, with its forward price-to-earnings multiple standing at 24.5.
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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.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool owns shares of and recommends Amazon and Baidu. The Motley Fool recommends BlackBerry, BlackBerry, CINEPLEX INC., and Savaria and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned.