Although markets continue to trade volatile, few names have started looking all the more attractive of late. Here are three such TSX stocks that offer handsome growth potential in the long term.
Air Canada
While many stocks have breached their pre-pandemic levels, Air Canada (TSX:AC) stock is still trading at a 50% discount. But finally, the year 2022 could see the most awaited revival of AC stock.
Air Canada saw encouraging revenue growth in Q4 2021; it grew 230% year over year. Although the bottom line is still in the red, the flag carrier reported positive EBITDA for the first time in the last seven quarters.
As geopolitical tensions subside, full re-openings should gain steam and passenger air travel will likely increase. Moreover, Air Canada’s cash burn has already been trending lower for the last few quarters. However, at the same time, rising jet fuel prices will eat up a larger share of revenues, negatively impacting profit margins.
AC stock is currently trading at $24 and is up 13% in 2022. If you are a long-term investor, it makes sense to bet on the recovering AC stock to play the post-pandemic rally.
BRP
Canada’s Powersports vehicle maker BRP (TSX:DOO)(NASDAQ:DOOO) is another interesting bet. The stock has recently fallen close to its 52-week lows, taking its drop to 16% so far this year.
A $7.6 billion BRP operates in more than 130 countries and owns popular brands like Ski-Doo and Sea-Doo. It derives more than half of its total revenues from the U.S., while Canada brings in 16%, and the rest of the world contributes the rest.
BRP saw handsome financial growth in the last two years, despite the pandemic and related mobility restrictions. For the last 12 months, the company reported a net income of $848 million versus $363 million in fiscal 2021.
BRP will likely see increased demand when travel resumes post-pandemic. As a result, the management has given an upbeat outlook for the next year, with an expected normalized earnings growth of about 72% year over year.
Interestingly, such a steep growth stock is trading 10 times its earnings and looks notably cheap. The stock could see a handsome recovery, as the travel resumes in the post-pandemic world.
Enbridge
Canadian energy pipeline operator Enbridge (TSX:ENB)(NYSE:ENB) would be a classic pick in the current uncertain markets. Its stably increasing dividend could be highly comforting when growth stocks turn volatile.
Enbridge yields 6.1% at the moment and offers one of the highest yields among Canadian bigwigs. Its long-term contracts enable earnings stability, which, in turn, facilitates a stable dividend.
Enbridge has increased its dividend for the last 27 consecutive years. It will likely continue the streak in the future, driven by its low-risk operations.
ENB stock has gained 35% so far this year and is currently trading at its 52-week high. If you are looking for stable dividends in the long term, ENB is an attractive option, even at its current levels.
