Due to rising inflation and geopolitical tensions, markets have been quite volatile lately. Despite the volatility, some names offer handsome growth prospects for long-term investors. So, if you are sitting on some cash, investing in these TSX stocks makes sense.
Nuvei
Canada’s fintech company Nuvei (TSX:NVEI)(NASDAQ:NVEI) will report its Q1 2022 earnings on May 10. NVEI stock saw huge wealth destruction and has vanished $15 billion of market cap since September last year. So, it will be interesting to see if its upcoming quarterly performance helps the stock and its investors.
Nuvei provides a payment-processing platform to its merchants and supports more than 530 payment methods. It operates with 150 currencies and with +200 global markets. So, it is a relatively small company working in a huge addressable market.
Nuvei management is confident about its growth outlook for the observable future. It expects +30% revenue growth annually with a 50% EBITDA margin in the medium term. So, with decent financial growth visibility and geographic expansion, I think NVEI could unlock a meaningful shareholder value in the long term.
It is currently trading at $73, still 60% lower than its all-time high of $180. It will likely be a relatively slow climb to those levels. But the stock looks attractive after its massive correction.
Precision Drilling
Along with energy producers, drillers and oilfield stocks have also been on the rise of late, thanks to rallying oil and gas prices. For example, Precision Drilling (TSX:PD), a $1.1 billion oilfield services company, has returned almost 160% since the last year.
As producers increase their output to benefit from the higher oil and gas prices, drillers like Precision see higher business opportunities. Though the company reported a loss in Q1 2022, the management is optimistic about the higher demand for its services.
Strong demand and higher fleet utilization levels will likely see superior cash flows for PR in the next few quarters, as the mainstream Canadian energy saw recently. As a result, Precision Drilling’s deleveraging efforts could gain steam and improve its balance sheet strength.
Oil and gas prices will continue to dominate Precision Drilling stock. So, considering the tight energy markets, oil prices will likely keep trading strong and the PD stock.
Fortis
After two growth stocks, here is one defensive stock to diversify your portfolio risk. Consider top utility stock Fortis (TSX:FTS)(NYSE:FTS). Its slow-moving stock and regular dividends make it an apt bet for conservative, income-seeking investors.
FTS serves more than two million customers and earns highly stable revenues. Higher earnings visibility allows stable dividend payments. It currently yields 3.5% and has increased dividends for the last 48 consecutive years.
Utility stocks are perceived as bond proxies because of their stable dividends. Stocks like Fortis outperform in bearish markets and lag in bull markets. That’s why investors take shelter under them when broader market uncertainties increase.
If you are looking for capital protection and moderate returns are okay for you, Fortis could be a prudent bet. It has returned 163% in the last 10 years, notably outperforming the TSX Composite Index.
