The turbulence outside the country, particularly bank failures in the U.S., is shaking Canada’s main stock index. Nearly all primary sectors are under pressure, although six are in positive territory year to date. For individual stocks, beating the broader market TSX shows stability against strong headwinds.
Top TSX stocks Algonquin Power & Utilities (TSX: AQN) and Viemed Healthcare (TSX: VMD) continue outperforming with gains of 20.8% and 32.8%, respectively. Both are excellent buying opportunities, as they trade below $15 per share.
Long-term profitable growth
Algonquin Power & Utilities, a stalwart in global renewable energy, maintains a low-risk profile through its portfolio of long-term contracted wind, solar, and hydroelectric generating facilities. The $7.3 billion growth-oriented company also has a robust pipeline of renewable energy development projects.
As of December 31, 2022, Algonquin has over 600 megawatts of wind and solar projects in various stages of construction. Also, about 450 megawatts will come into service by year-end 2023. Management is focused on supporting Algonquin’s financial foundation and driving long-term profitable growth.
Its President and CEO, Arun Banskota, said the company closed 2022 on stable ground. Total revenue increased 22% to US$2.8 billion versus 2021, although net loss reached US$212 million. However, cash provided by operating activities jumped 293% year over year to US$619.1 million.
At $10.65 per share, prospective investors can partake in the attractive 5.47% dividend. The yield is 40% lower than the previous quarter after decisive actions to strengthen Algonquin’s financial position. Besides the slash in the quarterly dividend, management will reduce capital intensity to address changing market conditions.
Algonquin desires to reduce its reliance on equity capital markets and doesn’t foresee new equity financings for the next two years. At year-end 2022, the available liquidity on the revolving and term credit facilities was approximately $2.3 billion. Bankota assures investors that the company will continue to execute its strategic priorities that well-prepare Algonquin for the future.
Darren Myers, Algonquin’s CFO, said, “Our regulated and renewables businesses are both well positioned to contribute to and benefit from the decarbonization transformation that is currently underway and which will only strengthen over the coming years.”
Growth opportunities
Healthcare was among the battered sectors in 2022 at the height of runaway inflation and rising interest rates. Fortunately, Viemed was an exception. At only $13.64 per share, the trailing one-year price return is 109.9%. Had you bought $6,000 worth of shares and held the stock in a Tax-Free Savings Account (TFSA), your money would be worth $13,011.13 today.
The $520.6 million company is an expert in home disease management. Respiratory therapists, licensed clinical social workers, clinicians, and healthcare administrators comprise Viemed’s team. They help patients manage serious respiratory conditions, including chronic obstructive pulmonary disease (COPD), neuromuscular diseases, and obstructive sleep apnea.
For the full year 2022, total revenue climbed 18.6% to US$138.8 million versus 2021. However, net income declined to US$6.2 million from US$9.1 million last year. Viemed’s CEO, Casey Hoyt, said, “The healthcare market and regulatory environment are stabilizing and we are at an inflection point of opportunity for both organic and inorganic growth.”
Cheap buys
Expect Algonquin and Viemed to capitalize on growth opportunities available to them. Soon, their share prices will be considerably higher than today.
