3 Best TSX Stocks to Buy As 2021 Winds Down

With 2021 winding down, investors seeking income and capital gains can buy two TSX30 winners and a high-flying energy stock.

| More on:
online shopping

Image source: Getty Images

A 10-session winning streak is a mean feat if the TSX finishes above 21,000 on October 19, 2021. Nearly all sub-groups except one (healthcare) are in positive territory. We’re two-and-a-half months from year-end, and now is an excellent time to take positions in the best stocks.

Three names stand out because their impressive performances could extend to 2022. Aura Minerals (TSX:ORA), Absolute Software (TSX:ABST)(NASDAQ:ABST), and Enerplus Corporation (TSX:ERF)(NYSE:ERF) are must-buys as 2021 winds down.

TSX30 winner

Aura Minerals, number one on the 2021 TSX30 list, is a no-brainer buy. The mining stock beat Shopify for the top spot due to its +1,125% performance in the last three years. The $12.41 share price (-9.9% year-to-date) is a good entry point. Market analysts’ forecasts see a return potential of 68.7% ($20.94) in the next 12 months.

Another compelling reason to pick up Aura is its 8.27% dividend is the combination of income and capital growth. Assuming the forecasts are correct, a $10,000 investment today will compound to $16,873.49 in 12 months and earn $827 in dividends.

The $900.5 million gold and copper miner is one of 14 mining companies that made it to this year’s TSX30 edition. Besides Shopify, it bested Trisura Group, Ballard Power Systems, and Capstone Mining.

Rare gem

Absolute Software is a rare gem in the technology sector because it pays dividends (2.27%). It’s also a TSX30 winner in 2021 (rank 24) for its +183 performance in the last three years. Along with Shopify, EcoSynthetixReal Matters, and TECSYS and Absolute are the five tech names in TMX Group’s top growth stocks list. 

The $696.85 million company is known globally for its cloud-based endpoint visibility and control platform. Customers in the private and public sectors use the platform to manage and secure computing devices, applications, and data. About 500 million devices have a permanent digital connection because of Absolute’s endpoint security platform.

In the full-year fiscal 2021 (year ended June 30, 2021), revenue growth was 15% compared to fiscal 2020. Christy Wyatt, Absolute Software’s President and CEO, said, “This was a year unlike any other in Absolute’s history, marked by record financial results and major business milestones.” Market analysts have a 12-month average price target of $18.49 for the tech stock, a 30.9% increase from $14.12.

High flyer

Complete your last quarter’s purchase with Enerplus from the red-hot energy sector. Investors enjoy a 188.7% year-to-date gain. Also, the current share price of $11.29 is 358.9% higher than a year ago. The icing on the cake is the modest 1.32% dividend. Management has already increased dividends twice this year. Based on analysts’ buy rating, the return potential in 12 months is between 22% and 50.6%.

The $2.91 billion independent exploration and production company develops high-quality oil and natural gas assets. You can find its oil assets in the Williston Basin (North Dakota and Montana) and Western Canada. Enerplus also has a position in a natural gas shale play in Northeast Pennsylvania.

Profitable stock portfolio

Two TSX30 winners and one high-flying energy constituent form a profitable stock portfolio. Would-be investors can expect recurring income streams and considerable capital gains from the three dividend-paying growth stocks. Last, the businesses should thrive further in post-pandemic when economic recovery goes to high gear.

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 Christopher Liew has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends CARGOJET INC., Shopify, TRISURA GROUP LTD, and Tecsys Inc. The Motley Fool recommends Absolute Software Corporation, Real Matters Inc, and TMX GROUP INC. / GROUPE TMX INC. and recommends the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify.

More on Dividend Stocks