Tax-Free Savings Account (TFSA) investors who have yet to maximize their limits or have available contribution rooms have two excellent investment options this month. Cargojet (TSX: CJT) reported a 26.1% revenue growth in the most recent quarter, while Verde Agritech (TSX: NPK) has gained 167.14%, thus far, in 2022.
Pick one or both if you want your TFSA balance to grow substantially in one year. Based on market analysts’ 12-month average price targets, both stocks have return potentials of more than 60%. Barring major disruptions in their respective businesses, Cargojet and Verde Agritech should deliver consistent growth in the quarters ahead.
Successful diversification strategy
Cargojet is an interesting pick for TFSA investors after Canada’s leading air cargo provider reported impressive Q4 and full-year 2021 results. In Q4 2021 (quarter ended December 31, 2021), net income reached $102 million compared to the $20.5 net loss in Q4 2020.
For the full-year 2021, total revenue grew 13.4% year-over-year to $757.8 million, while net income was $167.4 million. The $2.63 billion company lost $87.8 million in 2020. According to Dr. Ajay Virmani, Cargojet’s President and CEO, the company is preparing for the post-pandemic world.
Virmani said, “Cargojet now has a substantially larger base of business to build upon compared to its pre-pandemic size and scale. Building on the strong foundation of our domestic overnight network, we are aggressively diversifying to take advantage of the emerging growth opportunities.”
While the ongoing pandemic caused structural changes in the aviation industry, demand for air cargo services increased significantly. Management said the COVID-19 pandemic accelerated demand for e-commerce at an unprecedented rate. The company will also capitalize on the structural shift that happened to grow its international footprint.
Market analysts forecast the current share price to $153.51 to appreciate by 62.2% ($248.92) in 12 months. The overall return should be return as the industrial stock pays a 1.04% dividend.
Exponential growth expansion
Verde Agritech is a cheaper option for TFSA investors. The share price is only $7.48 per share, although the trailing one-year price return is 518.2%. Based on analysts’ price forecasts, the upside potential is 67% ($12.39).
This $357.18 million agricultural technology company is a producer and seller of fertilizers. Brazil is its primary market. Management will present its Q4 and full-year 2021 results by month-end. However, if the Q3 results were the gauge, the financial results should be equally impressive.
After three quarters in 2021 (nine months ended September 30, 2021), revenue increased 142.3% to $16.85 million versus the same period in 2020. Verde Agritech’s gross and net profits climbed 185.1% and 121.6% compared to same period in the prior year.
Its founder and CEO, Cristiano Veloso, said, “Our hard work over the years is yielding consistent growth. In Q3 2021 the effort was relentless as we sought to meet our heightened target, which was achieved thanks to the high quality and commitment of our team.” Management commits to maintain an exponential growth expansion for the foreseeable future.
Thriving businesses
Cargojet and Verde Agritech are valuable additions to a TFSA portfolio. Both stocks can deliver outsized returns even without the dividends. The respective businesses are thriving, notwithstanding the challenging environment.
