The TSX stock market has caught a chill as we head into the cold Canadian winter. Ever-rising interest rates are starting to cool the economy. The stock market is weighing whether this will impact the earnings and growth of Canada’s listed companies.
While these macroeconomic trends are concerning, you can pick up some great businesses that happen to have some temporary challenges. Here are three TSX stocks to buy with $5,000 as we head into a fresh November.
A TSX stalwart stock every Canadian can own
Canadian National Railway (TSX:CNR) stock is down 7% in 2023. It has a dividend yield of 2.1%, which is close to its highest yield in three years.
Canadian National has had ample challenges this year. Fires, weather events, strikes, and more fires have caused significant disruption in the transport industry. As a result, earnings have been stagnant, and it has had to revise guidance a few times.
Yet, this is a great business all around. The company targets 10-15% annual earnings-per-share growth over the coming three years. That likely translates to significant dividend increases and more share buybacks in the years ahead.
A stock for income, growth, and value
Calian Group (TSX:CGY) is another TSX stock to take a look at in November. This stock is down close to 25% in 2023. The company got hit this year by a slowdown in its cybersecurity business. Earnings in the third quarter were disappointing, and the company had to revise its year-end guidance down.
Fortunately, Calian was quick to restructure, and it should right-side margins going into a new fiscal year. 50% of its customers are government agencies, so a large component of its revenues is very secure. Likewise, it has a $1.1 billion backlog, which is about 1.7 years of revenues.
Today, this stock trades for only 12 times normalized earnings. That is the cheapest it has been in five years and below its five-year average of 16 times, which suggests it’s a good bargain right now.
In recent years, this company has grown adjusted earnings by 10-20% per year. It pays a decent 2% dividend, so it’s a nice bet for income, growth, and value right now.
An outperforming TSX energy stock
Cenovus Energy (TSX:CVE) is one TSX energy stock that is just beginning to hit its stride. The company has faced some challenges from its downstream business.
Those issues have been ironed out. It resulted in a recent beat on third-quarter results. The company produced $2.4 billion of excess cash in the quarter, which was an increase of 170% from last year.
Its upstream and downstream businesses produced respective 9% and 24% higher output/throughput. The company reduced debt by $1 billion in the quarter. It now has $6 billion of net debt. Once it hits its $4 billion debt target, it plans to return 100% of its excess cash right back to shareholders.
That will likely take a few quarters. However, afterwards, shareholders are in store for some very nice base dividend increases, special dividends, and ample share buybacks. If you want some exposure to strong energy prices, this is one of the best TSX stocks to buy now and hold for a while.
