Thanks to the robust stimulus package, economic rebound, and easing restrictions, one could find several TSX-listed stocks trading near their 52-week highs. As these stocks trade near their record highs, I see further room for growth in a few on the back of the favourable industry trends, accretive acquisitions, ongoing vaccinations, and uptick in economic activities.
While these stocks could witness occasional dips on account of profit booking, the long-term fundamentals remain intact, indicating further upside.
Let’s dig into three such TSX stocks that could continue to trend higher in the coming years.
Bank of Montreal
Shares of Bank of Montreal (TSX:BMO)(NYSE:BMO) have risen over 80% in one year and crafted a new 52-week high of $131.10 on Aug. 24, after the bank reported yet another stellar quarterly result. Bank of Montreal’s revenue continued to grow at a healthy pace. Meanwhile, its bottom line recorded year-over-year growth of about 86%, lifting investors’ sentiment.
Higher revenues, the release of provisions, and improved efficiency ratio are the reasons behind the stellar growth in Bank of Montreal’s Q3 earnings.
I remain upbeat on Bank of Montreal stock due to its diversified business mix, strong expense management, and high-quality earnings base. I expect economic expansion and revival in credit demand to boost Bank of Montreal’s financials in the coming quarters and drive its dividend payments and stock price. It’s worth noting that Bank of Montreal has paid dividends for 192 years and offers a yield of 3.2% at current price levels. Meanwhile, it trades much lower than most of its peers, signaling further upside in the stock.
Lightspeed Commerce (TSX:LSPD)(NYSE:LSPD) stock has delivered sky-high returns in the past and made its investors rich, benefitting from the growing adoption of its digital platform. Lightspeed stock gained 554% since it was listed on the TSX in March 2019 and is up about 205% in one year. Furthermore, it hit the 52-week high of $123.83 on Aug. 24.
Despite the normalization in demand, I expect the rally in Lightspeed stock to continue, owing to its staggering revenue growth, higher demand for its digital offerings, and accretive acquisitions. Furthermore, its growing customer base, expansion in high-growth markets, new product launches, and up-selling opportunities could continue to support its financials and provide a solid growth foundation.
Capital Power (TSX:CPX) is another stock that touched a 52-week high of $43.23 yesterday. Notably, it has witnessed a growth of about 56% in one year, and I believe it has further room to run. The utility company has a growing asset base and a solid renewables portfolio, positioning it well to deliver solid long-term returns.
Further, its low-risk business, power-producing assets, and contractual framework help it deliver higher earnings and predictable cash flows, which could continue to drive its dividend payouts and stock price. During the most recent quarter, Capital Power raised its dividend by 6.8%, marking the eighth consecutive increase in annual dividend. Meanwhile, it trades well below its peer group average, making it a solid buy, even at current levels.
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 owns shares of and recommends Lightspeed POS Inc and Lightspeed POS Inc.