The 3 Best Canadian Stocks to Buy in December 2021

Christmas is just around the corner. Here are three top Canadian stocks that are on my investment wish list for December and beyond.

| More on:
Dollar symbol and Canadian flag on keyboard

Image source: Getty Images

With recent news about another COVID-19 variant, Canadian stocks have taken a slight pullback. You can participate with the panicked sellers, or you can be opportunistic and buy stocks while they are trading at a discount.

Are you looking for some Canadian stocks with both current and long-term growth prospects? Here are three top Canadian stocks you can buy in December and hold in 2022 and long beyond.

Andlauer: A leader in niche transportation

The first Canadian stock is Andlauer Healthcare Group (TSX:AND). While this $1.99 billion company only listed in late 2019, it is up 144% since then. It operates Canada’s only nationwide transportation network specifically designed for the healthcare sector. It has contracts with most of the largest pharmaceutical and health science services in the country.

While COVID-19 vaccine distribution does not make up a huge part of its business, it still is a positive windfall. The company has also been expanding its network into the U.S., which is looking like an entirely new growth vertical.

Andlauer has been growing annually by about 10%. However, it produces really attractive +20% EBITDA margins. For a transportation business, that is impressive profitability. For a steady, consistent compounding stock with a strong competitive moat, this is a great Canadian stock to buy in December.

Canadian Pacific Railway: A great blue-chip stock

Another vital transportation business is Canadian Pacific Railway (TSX:CP)(NYSE:CP). After some of the flooding events in British Colombia, its stock has pulled back by around 6%. A recent analyst downgrade by Deutsche Bank also has not helped the stock.

The analyst was concerned that CP’s recent $8.45 billion debt offering to fund the potential merger with Kansas City Southern could put pressure on long-term earnings results. Certainly, that is something investors ought to watch. However, the financing was done at incredibly low, staggered interest rates of between 1% and 3%. Certainly, it is a lot of debt, but this is relatively cheap money to fund the acquisition.

The KCS deal gives CP a strong competitive position with a continuous line across Canada, the United States, and Mexico. Likewise, CP’s CEO, Keith Creel, has been an expert at unlocking efficiencies and synergies. Mexico just approved the deal, so the merger is making steady progress towards completion. If CP is able to execute well, this deal should help it accrete high single-digit annual returns for many years ahead.

Descartes Systems: A top Canadian tech stock

Keeping the transportation theme alive, Descartes Systems (TSX:DSG)(NASDAQ:DSGX) is an interesting technology play on the sector. Descartes provides networks and software services for the global logistics industry. It provides software for everything from routing to compliance to e-commerce/fulfillment management.

In a time where supply chain challenges are hampering businesses, Descartes services are ever in demand. The company has been growing EBITDA by about 20% a year for the past five years. However, both revenue and profitability have been accelerating this year. Its services become essential to businesses once adopted. Consequently, it has very low customer churn and revenues are very sticky.

While this Canadian technology stock is not cheap, it is a very high-quality growth business. Descartes has zero debt, a lot of cash, and tons of optionality on where it can grow. For that, it is one of my top growth stock picks for December and years ahead.

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 Robin Brown owns shares of DESCARTES SYS. The Motley Fool owns shares of and recommends Andlauer Healthcare Group Inc.

More on Stocks for Beginners

Two seniors float in a pool.
Stocks for Beginners

2 Smart Stocks to Buy in 2023 That Could Help You Retire Richer

When it comes to investing in smart stocks on the TSX today, these two are some of the best that…

Read more »

exchange-traded funds
Stocks for Beginners

ETFs: How to Invest $1,000 in March 2023

Here's how I would lazily invest with $1,000.

Read more »

Stocks for Beginners

How TFSA and RRSP Investors Can Turn $20,000 Into $580,000 in 20 Years

For long-term growth, a low-cost S&P 500 index ETF might be all you need.

Read more »

Illustration of bull and bear
Dividend Stocks

TFSA Investors: 2 TSX Stocks Set to Thrive in the Next Bull Market

Canadian Tire and another dividend growth play that's getting way too cheap to ignore amid the market's turbulence.

Read more »

edit Close-up Of A Piggybank With Eyeglasses And Calculator On Desk
Stocks for Beginners

Investors: How Do Canadian Bank Stocks Stack Up to U.S. Banks?

Here's why Canadian bank stocks could outperform their US peers.

Read more »

stock market
Stocks for Beginners

A Bull Market Is Eventually Coming: 1 Stock to Buy Now and Hold Forever

Investors may be uncomfortable in market downturns, but try to stay the course and focus on the long term to…

Read more »

Dividend Stocks

5 Steps to Making $500 in Monthly Passive Income in 2023

Generating monthly passive income isn't as hard as it sounds. Here are 5 steps to start making $500 every month.

Read more »

Various Canadian dollars in gray pants pocket
Stocks for Beginners

3 Passive-Income Ideas to Build Long-Term Wealth

Set up to earn multiple passive-income streams to complement your active income. Dividend stocks are an excellent way to start.

Read more »