2021 is an interesting year to be a stock picker. Meme stocks and growth stocks seem to have fallen out of favour. This is why robust stocks with strong fundamentals are probably the best stocks to buy now.
Here are the top three Canadian stocks that should be on your radar for August 2021.
Best growth stock to buy now
Topicus (TSXV:TOI) is a top pick for stocks to buy now. It was a much better buy just a few months ago. Investors who’d bought the overlooked tech stock in May are already up 32% on their investment. Nevertheless, the company has plenty more room to grow.
Topicus acquires small- and mid-sized software firms across Europe. Their targets are usually niche software providers. Think agricultural land management, human resources, billing, and other boring but profitable software tools. These tools are immensely profitable and deliver consistent, recurring cash flows.
At the moment, Topicus stock is priced at a 20 times multiple to trailing cash flow. However, cash flow is likely to increase, as the team acquires more companies this year. That means Topicus stock is severely undervalued given its growth prospects. This could be the ideal Canadian tech stock to buy now.
Best cheap stock to buy now
If tech isn’t your thing, you could make a bet on Canada’s most robust industry: banking. TD Bank (TSX:TD)(NYSE:TD), the nation’s second-largest lender, is in excellent shape. Canadian households have saved and borrowed at a record pace over the past year. That’s pushed most bank’s profits up by double-digit percentages.
However, what sets TD Bank apart is its valuation. The stock is currently trading at a price-to-earnings ratio of just 10.8. In other words, it offers an earnings yield of 9.25%. The stock also offers a 3.77% dividend yield. That’s incredible given that the rest of the market is trading at a P/E ratio of 18 and offers a dividend yield of just 2.5%
TD Bank faces several tailwinds in the year ahead — including a recovering economy and red-hot housing market. Investors looking for a safe place to park their cash must consider this stock.
Best new stock to buy now
The Toronto-based construction company stands to benefit from the renewed interest in capital investments and infrastructure projects across North America. In its most recent quarter, the company booked roughly $971 million in revenue and adjusted EBITDA of $61 million. In 2021, it’s on track to record over $4 billion in sales.
However, the stock has been overlooked and, thus, underpriced. Although it’s up 44% this year, the stock trades at just 14.4 times earnings per share. Those earnings are expected to grow by double digits through the year ahead. The stock also trades at a mere 40% premium to book value per share.
This dividend-paying, underrated construction company is one of the best value stocks to buy now.
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.
The Motley Fool owns shares of and recommends Topicus.Com Inc. Fool contributor Vishesh Raisinghani owns shares of Topicus.com.