The stock market continues to trend higher, despite concerns related to the resurgent virus and high valuation. Strong recovery in consumer demand, economic expansion, and acceleration in vaccination are driving corporate earnings and, in turn, stocks.
For instance, shares of goeasy (TSX: GSY), StorageVault Canada (TSXV:SVI), and Bank of Montreal (TSX: BMO)(NYSE: BMO) have gained over 268%, 95%, and 72%, respectively, in one year.
While these stocks have risen fairly in value, I see further upside on the back of an increase in economic activities and expect these companies to outperform the broader markets over the next several quarters.
Let’s look at each of these stocks to know why you won’t regret adding these stocks to your portfolio.
goeasy
goeasy stock is on an uptrend and has delivered sky-high returns over the past several years. The primary reason behind its outperformance is its strong financial and operating performance. For those who do not know, goeasy’s top and bottom line has consistently grown at a strong double-digit rate in the last two decades.
Looking ahead, I expect the momentum in its revenue and profitability to sustain on the back of higher loan origination, solid payments volume, and strategic acquisitions. Further, a large total addressable market, geographic and channel expansion, increased penetration of secured loans, and new products will likely support its growth.
It’s worth noting that goeasy has rewarded its shareholders with higher dividend payments. It has paid dividends for 17 years in a row and increased it in the last seven years at a CAGR of 34%. I believe the company’s high-quality earnings position it well to enhance its shareholders’ returns through higher dividend payments in the coming years.
StorageVault Canada
StorageVault Canada is another stock that has made its investors rich. The stock is currently trading near its all-time high levels, and I expect the rally to sustain. Its dominant positioning in the domestic market, strong fundamentals, and lower competitive activities due to significant barriers to entry position it well to deliver stellar returns in the coming quarters.
StorageVault’s underlying business remains strong, reflected through its higher occupancy rate and growing rental space. Further, its accretive acquisitions will likely accelerate its growth and drive its cash flows. Overall, StorageVault offers strong growth and is trading cheap, making it an attractive long-term bet.
Bank of Montreal
With its solid deposits base and ability to drive loan volumes, Bank of Montreal is another lucrative investment option. The bank’s long dividend payment history (it has paid dividends for 192 years) and a yield of 3.3% make it a top stock for income investors. I believe the bank’s high-quality earnings base, strong credit performance, and improved efficiency will likely support its future earnings and dividend payouts.
Furthermore, Bank of Montreal’s diversified business mix, improving credit demand, and operating leverage augur well for its future growth. Also, an improving operating environment, strong balance sheet, and expected increase in interest rates further support my optimism on the stock. Notably, Bank of Montreal stock trades lower than most of its peers, making it attractive on the valuation front.
