The Canadian economy is displaying a greater degree of resilience than expected this year. Yet several fundamentally strong TSX tech stocks trade at discounted rates. Investing right now can mean outsized long-term returns. However, that’s not the only sector worth looking at right now.
Amid the ongoing escalation of the violence in Israel, the energy sector will likely see a boost as supply concerns increase. The question is, which sector might be a better space for you to invest in right now?
The strength of the economy and long-term prospects might make investors favour tech stocks more. However, potentially elevated oil prices in the near to medium term also make energy stocks an enticing prospect.
In this article, we will look closely at a top stock from each sector to determine which industry might warrant allocating some of your investment capital today.
Canadian Natural Resources
Canadian Natural Resources (TSX:CNQ) is a $96.52 billion market capitalization senior oil and gas company. Headquartered in Calgary, it operates a diversified portfolio of assets that boast a low decline rate and long reserve life. The company’s efficient and effective operations reflect its reputation as a solid company to invest in.
Analysts anticipate oil prices to remain high in the near to medium term, possibly rising significantly higher. Considering this factor, I expect the company’s profit margins to remain elevated. With management investing $5.4 billion to strengthen its asset base this year, higher production volumes can further boost its fundamentals.
As of this writing, CNQ stock trades at $88.57 per share, paying its shareholders at a juicy 4.06% dividend yield. Between its shareholder dividends and potential capital gains in the near term, it can be a good investment to consider if you favour the energy sector.
Lightspeed Commerce
Lightspeed Commerce (TSX:LSPD) has rapidly become a force to be reckoned with in the Canadian tech sector. The $2.98 billion market capitalization e-commerce-enabling tech giant is part of the transformation of the economy.
Lightspeed provides a cloud-based commerce platform unifying its customers’ physical and online operations. It also generates significant revenue through its payment solutions and cloud-based software subscriptions.
With its recent shift to target customers with high gross transaction volume (GTV), the company plans to continue growing its average revenue per user (APRU). Its first-quarter performance in fiscal 2024 saw a 20% rise in its top line, reflecting its strong performance. As of this writing, Lightspeed Commerce stock trades at $19.60 per share.
Down by over 87% from its all-time high, the stock has every bit of potential to recover to those levels in the long run. Poised for growth, it can be a solid buying opportunity for investors who want to buy a top growth stock at discounted rates.
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Foolish takeaway
Poised to benefit in the long run from the ongoing shift in selling models toward omnichannel platforms, Lightspeed stock is a strong contender for massive long-term gains. It can be a solid buy-cheap-sell-high opportunity for investors willing to accept the risk of investing in the relatively volatile tech sector.
That said, Canadian Natural Resources stock can experience a massive boost sooner than tech sector investors can realize the returns on their investments. Trading at an attractive valuation, it might be a better pick for investors with a shorter investment horizon.
