The TSX has piled up multiple record highs during its bull rally, thus far, in November 2021. Investors have excellent buying opportunities to build a portfolio that could deliver both passive income streams and massive capital gains.
If you were to purchase stocks this month, consider such stocks as Vermilion Energy (TSX:VET)(NYSE:VET) and Real Matters (TSX: REAL) for capital growth. For uninterrupted income streams, invest in the North West Company (TSX:NWC).
Spectacular run
Many energy stocks are having a superb performance this year due to rising commodity prices. Vermilion Energy benefit from it too, and it reflects in the stock’s performance. At only $12.73 per share, the trailing one-year price return is 215.88%, while the year-to-date gain is 124.12%.
Had you invested $25,000 in Vermilion on November 12, 2020, your money would have grown to nearly $79,000 in 12 months. The $2.09 billion company used to pay dividends but had to stop the payouts in 2020 due to the oil slump and global pandemic. However, Vermilion Energy’s explosive returns this year compensates for the zero-dividends beginning in March 2020.
In the nine months ended September 30, 2021, petroleum and natural gas sales climbed 64% versus the same period last year. From a net loss of $1.45 billion, Vermilion posted $804.1 million in net income. Notably, free cash flow (FCF) increased 519% to $368.7 million. Because FCF is increasing, management plans to reinstate dividends in Q1 2022.
Discounted price
Real Matters made it to the TSX30 List two years in a row (2020 and 2021). This growth stock ranked 22nd last year and placed 16th in this year’s edition. The $758.38 million company provides network management services for the mortgage lending and insurance industries.
Despite the 9.6% consolidated revenue growth in Q3 2021 versus Q3 2020, Real Matters’ net income declined 16% to US$5.3 million. Nevertheless, the percentage increase in revenue was record-breaking. Lower title volumes in the U.S. resulted in lower profits.
Still, management is confident of Real Matters’ long-term growth strategy and ability to achieve its fiscal 2025 targets. Its platform will continue to leverage the proprietary technology to attract thousands of independent qualified field professionals and top 100 U.S. lenders.
At $9.51 per share, the growth stock trades at a discount (-50.49% year to date). Market analysts recommend a buy rating for Real Matters. Their 12-month average price target is $17.14, an 80% upside potential.
Reliable income provider
North West Company is best for risk-averse, income investors. The $1.7 billion company dominates the markets in far-flung communities and hard-to-reach regions. It’s a food retailer and provider of general merchandise and other allied services. The reach is Canada, Alaska, the South Pacific, and the Caribbean.
Management maintains a positive business outlook despite the 12.9% drop in consolidated sales in Q2 fiscal 2021 versus the same period in fiscal 2020. It expects earnings in 2021 to be above pre-pandemic levels (2019) but below 2020.
Meanwhile, NWC trades at $35.40 per share (+12.57% year-to-date) and pays a 4.18% dividend. In the last year 31.15 years, the total return of this consumer-defensive stock is 61,457.61% (22.9% compound annual growth rate).
Great prospects
The three TSX stocks in focus are great prospects if you’re chasing after income and capital growth in 2022.
