2 Mid-Cap Stocks That Could Lead Markets Higher in 2024

Badger Infrastructure Solutions (TSX:BDGI) and another mid-cap stock that’s full of long-term growth potential.

| More on:
Target. Stand out from the crowd

Image source: Getty Images

More than a handful of mid-cap stocks have been lagging in recent years, in the face of higher rates and a bleaker economic outlook. Though the mid-caps tend to be a choppier ride, beginner investors should still consider them as part of a diversified portfolio, given they may provide one with a better shot at outsized rewards. It’s far easier to double in size as a $3 billion company than it is for a $1 trillion company, given the immense room to grow market share.

For me, the mid-cap sweet spot tends to lie in the $1–5 billion range. Just because volatility is elevated relative to your average blue chip (at least in normal market conditions) does not mean they’re riskier. In some instances, mid-cap stocks may be a less risky pick than a mega-cap. It all comes down to the price you’ll pay and the width of the moats in the individual companies.

In this piece, we’ll check out two mid-cap stocks that I think could lead the way for the TSX Index going into the new year (and beyond).

Jamieson Wellness

Jamieson Wellness (TSX:JWEL) is an easy mid-cap ($1.2 billion market cap) to dismiss or overlook. The firm is in the boring business of vitamins, minerals, and supplements — a pretty commoditized industry. As one of the oldest mid-cap companies out there, though, its moat lies in its brand. It’s this brand that has allowed it to gain an edge over rivals in the ultra-competitive wellness and supplements scene.

The stock seems to be rebounding from its more than two-year funk, blasting nearly 33% off its October lows. I believe these gains are sustainable and could be the start of a move towards new highs. Though shares don’t look as cheap at 26.6 times trailing price-to-earnings, I do think JWEL’s growth runway (think of the growth possibilities in Asia) makes it worth a much higher price tag than is being offered today.

With a nice 2.6% dividend yield and a business that could withstand a coming recession, I’d not shy away from the name if you seek a multi-year growth darling to hold for the long haul.

Badger Infrastructure Solutions

Badger Infrastructure Solutions (TSX:BDGI), formerly Badger Daylighting, is in the niche business of mobile hydrovac soil excavation. In essence, the firm offers non-destructive excavation services for a wide range of firms. Many clients in the energy industry need Badger to dig up buried assets without damaging them.

In recent years, Badger has been on a wild ride. More recently, Badger has been climbing higher, thanks in part to strong quarterly results. Year to date, BDGI stock is up around 50%. That’s a huge climb for a firm that’s hibernated for quite a while. As the industry landscape (and Badger’s margins) looks to improve from here, I’d look for the stock to add to its recent gains. At 27.7 times trailing price-to-earnings, Badger still doesn’t look absurdly expensive as the fundamentals improve.

The Foolish bottom line

Mid-cap stocks can be promising plays for younger investors who are willing to stomach more volatility for a shot at better results over the longer haul. Jamieson and Badger are two mid-cap plays with a lot of potential and room to run.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Joey Frenette has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Investing

Dividend Stocks

The Top Canadian REITs to Buy in April 2024

REITs with modest amounts of debt, like Killam Apartment REIT (TSX:KMP.UN), can be good investments.

Read more »

edit Person using calculator next to charts and graphs
Stocks for Beginners

Where to Invest $7,000 in April 2024

Are you wondering how to deploy the $7,000 TFSA contribution increase in 2024? Here are four high-quality stocks for earning…

Read more »

Technology
Dividend Stocks

The Smartest Dividend Stocks to Buy With $500 Right Now

Some of the smartest buys investors can make with $500 today are stocks that have upside potential and pay you…

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

2 Dividend Stocks to Buy in April for Safe Passive Income

These TSX Dividend stocks offer more than 5% yield and are reliable bets to generate worry-free passive income.

Read more »

protect, safe, trust
Dividend Stocks

How to Build a Bulletproof Monthly Passive-Income Portfolio With Just $1,000

If you've only got $1,000 on hand, that's fine! Here is how to make a top-notch, passive-income portfolio that could…

Read more »

Senior Couple Walking With Pet Bulldog In Countryside
Dividend Stocks

CPP Insights: The Average Benefit at Age 60 in 2024

The average CPP benefit at age 60 in average is low, but claiming early has many advantages with the right…

Read more »

edit Sale sign, value, discount
Investing

2 Bargains I’d Buy as They Dip Toward 52-Week Lows

Spin Master (TSX:TOY) stock and another underrated Canadian play could surge again as they look to reverse course.

Read more »

thinking
Dividend Stocks

Why Did goeasy Stock Jump 6% This Week?

The spring budget came in from our federal government, and goeasy stock (TSX:GSY) investors were incredibly pleased by the results.

Read more »