3 of the Best TSX Stocks to Buy in August 2021

Strong consumer demand and recovery in corporate earnings are likely to keep the Canadian stock market buoyant. 

| More on:
You Should Know This

Image source: Getty Images

I continue to maintain a bullish view of the Canadian stock market. The ongoing vaccination, easing pandemic-led restrictions, a modest uptick in economic activities, strong consumer demand, and recovery in corporate earnings are likely to keep the stock market buoyant. 

With an improving operating environment, I have zeroed in on three Canadian stocks poised to deliver strong returns in 2021 and beyond. These TSX-listed companies could gain from the steady improvement in the economy and normalization in their operating activities. 

Bank of Montreal

Canadian banking giant Bank of Montreal (TSX:BMO)(NYSE:BMO) is well-positioned to benefit from the continued economic improvement and recovery in demand. Notably, its stock has gained about 74% in one year, and I expect the uptrend to sustain on the back of continued growth in its earnings. 

Bank of Montreal expects to generate a 7-10% growth in earnings in the coming years, which is encouraging. I believe the bank’s diverse revenue model, strong expense management, and solid credit performance will continue to cushion its profits. Furthermore, lower credit loss provisions and pickup in the loan volumes are likely to accelerate its growth.

Notably, the bank has consistently enhanced its shareholders’ value, and its strong earnings base suggests that the Bank of Montreal could continue to boost investors’ returns through increased dividend payments. 


Besides Bank of Montreal, investors could consider buying goeasy (TSX:GSY) stock in the financial space for outsized returns. This stock has increased by over 211% in one year. Moreover, I expect the rally in its stock to sustain thanks to its stellar financial and operating performances and good growth opportunities stemming from the recovery in economic activities and a large sub-prime lending market. 

I expect higher credit offtake, geographic and channel expansion, new product launches, and strategic acquisitions to support its revenues and profitability. Meanwhile, increased penetration of secured loans, strong payment volumes, and cost and productivity savings bode well for future growth. Investors are also likely to benefit from the company’s strong dividend payments.

It has consistently increased its dividend in the past seven years. Furthermore, its strong profitability indicates that its dividend could continue to grow at a significantly higher rate in the coming years. 


Cineplex (TSX:CGX) stock is another stock poised to deliver solid returns once its operations return to normal and COVID-19 led restrictions ease. The stock has witnessed strong buying in one year and has appreciated about 67% in hopes of a revival in demand. However, it continues to trade at a massive discount compared to the pre-COVID levels, making it a solid pick at current levels. 

I believe the ongoing vaccination and expected improvement in consumer demand could lead to a solid rebound in its financial and operating performance and push its stock higher. The reopening of its entertainment venues and theatres and increase in traffic are likely to support its earnings and lead to lower cash burn.

Further, a strong slate of theatrical releases bodes well for future growth. Despite the challenges from the pandemic, its focus on food-delivery services, private movie screenings, and other corporate events, and solid liquidity is likely to support its financials in the near term. 

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.

More on Bank Stocks

A plant grows from coins.
Bank Stocks

How to Invest in the Bank Bailout News

Highly liquid banks like the Toronto-Dominion Bank are the most viable buys in an environment in which banks are collapsing.

Read more »

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

RRSP Investors: Save on Taxes and Buy These 2 Cheap Bank Stocks

Are you looking to save taxes via RRSP contributions? Here are two TSX bank stocks you can hold in the…

Read more »

worry concern
Bank Stocks

Better Dividend Buy: BMO or CIBC Stock?

While both offer high dividends and immense value, does BMO or CIBC stock offer the better dividend buy?

Read more »

Hourglass projecting a dollar sign as shadow
Bank Stocks

Is Now the Right Time to Buy TD Bank Stock?

TD stock trades near its 12-month low Is this bank stock now oversold?

Read more »

A plant grows from coins.
Bank Stocks

3 Bank Stocks I’d Buy on the Dip

Bank stocks like Bank of Montreal can add some much needed dividend income to your portfolio.

Read more »

edit Business accounting concept, Business man using calculator with computer laptop, budget and loan paper in office.
Bank Stocks

2 Under-the-Radar Canadian Banks I’m Buying While the Buying Is This Good

I’m looking to snatch up undervalued and underrated bank stocks like Laurentian Bank (TSX:LB) in the final weeks of March.

Read more »

question marks written reminders tickets
Bank Stocks

What’s Next for Royal Bank of Canada Stock?

Royal Bank of Canada stock fell 7%, as bank stocks felt the tremors of the U.S. banking crisis.

Read more »

consider the options
Bank Stocks

Canadian Investors: Should You Be Worried About Scotiabank Stock?

The U.S. banking crisis created a selloff in global bank stocks. Should you be worried about Scotiabank stock or buy…

Read more »