3 TSX Stocks to Buy in December 2023

Here’s why quality TSX stocks such as Jamieson Wellness should be part of your shopping list in December 2023.

| More on:
Baubles On Snow With Snowy Christmas Tree

Image source: Getty Images

Investors should focus on creating a diversified portfolio of quality stocks, lowering their risk significantly. Ideally, investors need to pick fundamentally strong stocks that are equipped to generate cash flows and earnings across market cycles.

Here are three top TSX stocks investors can consider buying in December 2023.

Royal Bank of Canada stock

The largest TSX stock in terms of market cap, Royal Bank of Canada (TSX:RY) is valued at $166 billion. Down 20% from all-time highs, RBC stock currently offers shareholders a tasty dividend yield of 4.6%.

While RBC is part of the highly cyclical banking sector, its conservative lending approach and strong liquidity position have allowed it to maintain dividend payouts across business cycles. In the last 20 years, the TSX giant has raised dividends by more than 7% annually, which is exceptional for a bank stock.

In fiscal Q3 2023 (ended in July), RBC reported net income of $4 billion, or $2.84 per share, an increase of 11% year over year. Its Q4 results reflected higher provisions for credit losses with a PCL on loans ratio of 29 basis points.

Despite a challenging macro environment, RBC managed to increase its net income due to higher revenue in verticals such as corporate and investment banking. Moreover, higher interest rates resulted in an uptick in net interest income and strong volume growth in deposits.

Priced at less than 11 times forward earnings, RBC stock trades at a discount of 12% to consensus price target estimates.

Canadian Tire stock

One of the most popular retail giants in the country, Canadian Tire (TSX:CTC.A) offers shareholders a dividend yield of more than 5%.

While Canadian Tire sales were down 1.6% in Q3, revenue from essential products was up 4% compared to the year-ago period. To offset a sluggish economic environment, Canadian Tire has reduced capital expenditure expenses to $176.4 million in Q3, compared to $231.7 million in the prior-year period.

The TSX company also announced it would reduce its full-time employee count by 3%, resulting in annualized cost savings of about $50 million.

Moreover, Canadian Tire increased its dividends for the fourteenth consecutive year and now pays investors an annual dividend of $7 per share.

Analysts remain bullish and expect CTC stock to gain 15% in the next 12 months.

Jamieson Wellness stock

The final TSX stock on my list is Jamieson Wellness (TSX:JWEL), a company that operates in the natural health products space. JWEL stock trades 30% from all-time highs and offers you a dividend yield of 2.6%. Despite the pullback, the company has returned 90% to shareholders in dividend-adjusted gains in the last six years.

In Q3 2023, Jamieson Wellness increased revenue by 9.1% to $151.5 million due to 15% growth in Jamieson Brands. Its top line grew due to sustained consumer engagement in domestic markets where consumption outpaced shipments.

Additionally, new product launches, and e-commerce and distribution gains in the U.S. drove sales in the September quarter. The company also continued to experience momentum in China under an owned-distribution model.

Jamieson Wellness ended Q3 with a leverage ratio of 2 times and more than $222 million in total liquidity.

Priced at 15.2 times forward earnings, Jamieson Wellness trades at a discount of 30% to consensus price target estimates.

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 Aditya Raghunath 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 Dividend Stocks

money cash dividends
Dividend Stocks

Beat the Dow Jones With This Cash-Gushing Dividend Stock

Here's why this high-dividend TSX stock should beat the Dow Jones index in 2024 and beyond.

Read more »

Pixelated acronym REIT made from cubes, mosaic pattern
Dividend Stocks

The Top Canadian REITs to Buy in February 2024

Are you looking to boost your income and buy some stocks at a bargain? Here are three top REITs that…

Read more »

calculate and analyze stock
Dividend Stocks

Better Buy in 2024: Canadian Utilities Stock vs. Enbridge Stock

Dividend stocks like Enbridge (TSX:ENB) and Canadian Utilities (TSX:CSU) are staples of Canadians' portfolios.

Read more »

Increasing yield
Dividend Stocks

2 No-Brainer High-Yield Dividend Stocks to Buy Right Now for Less Than $1,000

Got $1,000? Here are two no-brainer stocks to buy now at their lows and start getting immediate returns of $75.

Read more »

Gas pipelines
Dividend Stocks

Is Keyera a Buy After Its Solid Fourth-Quarter Earnings?

Given Keyera's solid quarterly performance and healthy growth prospects, I am bullish on it.

Read more »

data analyze research
Dividend Stocks

Canadian Tire 2023 Earnings: Better Days Ahead

Weak consumer demand led to a drop in Canadian Tire's earnings. Investors need patience to enjoy better days with the…

Read more »

Economic Turbulence
Dividend Stocks

Intact Financial Climbs to All-Time High on Buybacks, With an 11% Dividend Increase

Intact stock (TSX:IFC) rose after the company reported a difficult year, but managed to increase buybacks and its dividend.

Read more »

A red umbrella stands higher than a crowd of black umbrellas.
Dividend Stocks

Manulife Stock Raises Dividend by 9.6% on Good Earnings in 2023

Manulife stock jumped almost 9% after earnings as it was too cheap to ignore! Its dividend yield is not bad,…

Read more »