Along with global equities, Canadian markets peaked to record levels this year from the pandemic lows. The TSX Composite Index surged 20% in 2021, lagging the S&P 500 that gained 30%. Some TSX stocks notably outfoxed broad market indexes this year and gained up to 260%. Let’s take a look at the top gainer TSX stocks of 2021.
#3 Enerplus
Canadian energy stock Enerplus (TSX: ERF)(NYSE: ERF) returned 220% this year, beating the TSX energy index by a wide margin. The stock has increased approximately 515% in the last 20 odd months from the pandemic lows.
The company is expected to report a free cash flow of $540 million this year, a steep increase from $67 million in 2020. Driven by the favourable energy price environment, Enerplus aims to increase its capital spending for the next year. It is forecast to spend $500 million on exploration and development against an expected capex of $380 million in 2021.
Enerplus increased shareholder dividends by a handsome 37% this year. Moreover, it expects free cash flow to increase by 19% next year as against 2020. So, shareholders can expect another year of a decent payout increase in 2022.
#2 Bombardier
Business jet maker Bombardier (TSX: BBD.B) stock holds the second spot, with a 250% gain in 2021. The stock has been trading weak almost throughout Q4 due to a host of reasons. Otherwise, the stock was sitting on record gains of 380% at its annual highs for the year.
The year 2021 started an important turnaround for the company with its business jet manufacturing business. The debt burden somewhat soothed with its sale of a train-making business to Alstom. The changed business saw some topline growth this year, which was enough to cheer investors. A lessening debt pile and a favourable start to financial growth drove the stock higher in 2021.
Bombardier’s next few quarters will significantly dictate the stock’s performance in 2022. However, apart from uncertain financial growth, valuation concerns could also weigh on the BBD stock.
#1 Birchcliff Energy
Energy stocks undoubtedly stayed at the top of the charts this year. A small-cap oil and gas stock, Birchcliff Energy (TSX: BIR) keeps the throne among the TSX Composite with a 257% gain.
The company zoomed to profits this year after consecutive losses earlier. In the last 12 months, Birchcliff Energy earned $249 million in net income versus a $58 million loss in 2020. Along with the remarkable financial growth, the stock took cues from the upbeat management commentary as well.
The company sees a supportive oil and gas price environment to remain amid re-openings next year. This could continue superior free cash flow growth in 2022, ultimately driving dividend growth and balance sheet strength.
Birchcliff is a $1.8 billion low-cost oil and gas producer that aims to produce 80,000 boe/d in 2022. That’s a flattish production growth versus 2021 and indicates a focus towards debt repayments and higher dividends.
