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2 Best Canadian Stocks Other than Cineplex (TSX:CGX) for Superior Returns

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Cineplex (TSX:CGX) stock has surged over 77% this year. Moreover, it jumped nearly 26% in one month amid hopes that its operations could soon return to normal and demand will pick up the pace. Despite the recent growth, I expect Cineplex stock to trend higher as widespread vaccination and easing lockdown measures could accelerate the pace of its recovery. Further, Cineplex’s operating capacity, revenues, and bottom line are likely to show improvement, providing a solid foundation for growth in its stock. 

While Cineplex is among the top Canadian companies that could benefit significantly from the economic reopening, I have shortlisted two more stocks that could deliver stellar returns as their operations return to normal and demand improves. 

Air Canada

Besides Cineplex, Air Canada (TSX:AC) is another top stock that could significantly appreciate on the back of easing travel measures and demand returning to normal. Air Canada stock has recovered a portion of its lost value and is up about 23.4% this year. However, it is trading significantly below the pre-pandemic levels, providing a solid opportunity for investors to buy its stock at the current levels. 

Air Canada’s revenues and capacity could show a sharp improvement in the coming quarters as the accelerated pace of vaccination could step up the recovery in travel demand. In addition, the airline company could also benefit from the continued momentum in its air cargo business. Notably, Air Canada has operated over 7,500 cargo flights since March 2020, significantly contributing to its financials. Further, increased demand from the e-commerce segment will likely boost its cargo revenues.

The company has sufficient liquidity to survive through the pandemic. Meanwhile, its lower cost base and the quarter-on-quarter improvement in its net cash burn rate are likely to cushion its bottom-line. Overall, the improvement in Air Canada’s operating capacity, reopening of international borders, and its lower stock price make it a steal at current levels

Suncor Energy

Similar to Air Canada, Suncor Energy (TSX:SU)(NYSE:SU) is another top investment option to benefit from the economic reopening and recovery in demand. Suncor stock is trending higher and is up over 41% this year. The ongoing vaccination and increase in economic activities have led to a stellar recovery in crude oil prices and driven energy demand higher.

Despite the recent run-up, Suncor Energy stock is trading at an attractive discount compared to its pre-COVID levels, making it an excellent investment at current levels. I believe investors with medium- to long-term investment horizons could consider adding Suncor stock to their portfolio as improving energy demand, higher volumes, and recovery in oil prices should support the uptrend. 

Notably, Suncor’s integrated assets and a strong balance sheet augur well for future growth. Moreover, its favourable revenue mix and lower cost base should cushion its bottom line, in turn, its stock. The energy giant is also focusing on lowering debt and rewarding its shareholders with share buybacks and dividends, which is encouraging. Currently, Suncor Energy stock offers a decent yield of over 2.7%.

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 Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool recommends CINEPLEX INC.

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