3 TSX Stocks You Won’t Regret Buying

Despite concerns related to the resurgent virus and high valuation, I see further upside in these TSX stocks.

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.  

Fool contributor Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

More on Bank Stocks

Concept of rent, search, purchase real estate, REIT
Stocks for Beginners

On a Variable Mortgage? Markets Are Now Betting on Hikes, Not Cuts

A rate hike remains possible, even after weak jobs data. Here's the household cost and the separate CIBC investment decision.

Read more »

woman checks off all the boxes
Stocks for Beginners

Using Your TFSA as a Retirement Account: Pros and Cons

The TFSA is an excellent tool to help you save and invest for your retirement nest egg, but there are…

Read more »

Paper Canadian currency of various denominations
Stocks for Beginners

Your Broker Withholds 15% on U.S. Dividends: Here’s The Tax Credit That Gets It Back

U.S. dividend withholding depends on your account, while BMO shows how a Canadian stock can offer U.S. exposure.

Read more »

Hand Protecting Senior Couple
Stocks for Beginners

How Much Do You Actually Need to Retire in Canada?

The same retirement lifestyle can require very different savings balances once pensions and withdrawal taxes enter the calculation.

Read more »

An investor uses a tablet
Bank Stocks

Brokerage Account Basics: What Canadian Beginners Should Look For

New to investing in Canada? Learn to compare brokerage fees, pick a TFSA, RRSP or FHSA, and see why Royal…

Read more »

Safety helmets and gloves hang from a rack on a mining site.
Stocks for Beginners

Canada Lost 68,000 Jobs in September: The October 28 Rate Call Just Got Harder

September's job losses complicate the rate decision, while Scotiabank shows why borrowers' relief and bank earnings aren't the same thing.

Read more »

man looks surprised at investment growth
Stocks for Beginners

Maxed Out Your TFSA? The Account Where Canadian Dividends Are Taxed Less

A taxable account gives eligible Canadian dividends a tax credit, but the gross-up can affect retirement benefits.

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Bank Stocks

Don’t Let Unused TFSA Room Go to Waste Before You Retire

Unused TFSA contribution room can help Canadians boost their nest egg and retire with confidence.

Read more »