Got $1,000? 3 Best TSX Stocks to Buy Right Now

Here are three top TSX stocks that look attractive from a valuation standpoint and offer decent growth prospects.

| More on:
stock research, analyze data

Image source: Getty Images

It’s not easy to find worthy investment ideas in such a frothy market. Investors should be wary of valuation in such markets and not just follow the exuberance. Here are three top TSX stocks that look attractive from the valuation standpoint and offer decent growth prospects as well.

Barrick Gold

The year 2021 is turning out to be a different year for gold miners and investors than 2020. While last year saw gold miner stocks reaching all-time highs, the year 2021 has largely been a reversal of those gains.

Importantly, their quarterly numbers were subdued and thus weighed on their stock prices. Top Canadian miner Barrick Gold (TSX:ABX)(NYSE:GOLD) reported its Q2 2021 earnings on August 9. Its net income fell 24% sequentially due to increased costs and lower production.

However, the second half of 2021 could change the course for miners like Barrick Gold. Barrick expects higher production for the second half, approximately in the range of 4.4 to 4.7 million ounces. The stock has already suffered enough and its discounted valuation could attract discerned investors. Moreover, higher gold prices could drive gold miner stocks higher like last year.

Barrick is the second-biggest gold producer across the globe with high-quality assets. Notably, higher realized gold prices combined with higher production in the post-pandemic world could unlock remarkable value for shareholders.

TC Energy

As markets continue to linger around all-time highs, it would be prudent to increase your portfolio exposure to defensive stocks. TC Energy (TSX:TRP)(NYSE:TRP) could be one of the top Canadian defensive stocks in the current situation. It yields a handsome 6% at the moment.

Midstream energy companies generally earn stable earnings driven by their low-risk, fixed-fee operations. Along with energy infrastructure, TC Energy is also involved in utility operations. Thus, the combination bodes well for diversification and earnings stability.

I’m aware that some of you might have a distaste for energy stocks. However, energy midstream stocks differ from their upstream peers on several fronts. They have a low correlation with energy commodity prices and much steeper dividend yields. TC Energy stock has delivered an average total return of 10% in the last decade, almost double that of the TSX Composite Index.

Air Canada

Things are finally moving in a positive direction for Air Canada (TSX:AC). Its recent Q2 2021 earnings highlight a strong recovery in the making. Also, releasing air travel restrictions could bring back top-line growth for Air Canada.

Air Canada’s operating capacity and net cash burn rate could significantly improve in the second half of 2021. Investors should note that even if the flag carrier has warned that it might take three years to reach 2019 profitability levels, it doesn’t mean that it would take three years for the stock to reach its record levels of last year.

I think pent-up demand post-pandemic will be the biggest driver for its revenue recovery and ultimately for the stock. Airlines south of the border have already started seeing green bottom lines and an encouraging outlook for the long term. Given its leading market share, stronger balance sheet, and increasing vaccinations, Air Canada could likely follow.

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 has no position in any of the stocks mentioned. Fool contributor Vineet Kulkarni has no position in any of the stocks mentioned

More on Dividend Stocks

Woman has an idea
Dividend Stocks

3 No-Brainer Best Dividend Stocks in Canada to Buy With $500 Right Now

Are you craving more cash flow? $500 in one of these best dividend stocks in Canada might deliver a slice…

Read more »

Canadian energy stocks are rising with oil prices
Dividend Stocks

5 Stocks Whose Dividends Just Keep Growing

Stocks like Enbridge and Fortis are growing their dividends for decades, and returning higher cash to their shareholders.

Read more »

Dividend Stocks

2 Stocks I’m Loading Up On in 2024

Restaurant Brands International (TSX:QSR) and another stock I'm pretty close to buying right here, right now.

Read more »

protect, safe, trust
Dividend Stocks

RRSP Investors: 2 Superior Dividend Stocks for Optimal Returns

Superior dividend stocks like the Canadian National Railway (TSX:CNR) can add income power to your portfolio.

Read more »

Increasing yield
Dividend Stocks

TFSA Passive Income: 2 High-Yield Stocks to Buy Before They Bounce

These top TSX dividend-growth stocks look cheap today and offer high yields.

Read more »

Portrait of woman having fun in the street.
Dividend Stocks

Why I Can’t Stop Buying Shares of This Magnificent High-Yield Dividend Stock in My TFSA

This dividend stock continues to be a top winner, even with returns falling the last few years. We're nearing some…

Read more »

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Dividend Stocks

TFSA Investors: 1 Cheap Dividend Stock That Could Soar in 2025

This dividend-growth stock now trades at a discounted price and offers a 7% yield.

Read more »

Hand writing Time for Action concept with red marker on transparent wipe board.
Dividend Stocks

1 Dividend Stock Down 13% to Buy Right Now

Are you looking for a buy-the-dip opportunity? This dividend stock is down 13% and is a buy right now before…

Read more »