2 TSX Stocks to Dominate the Market in 2024

Two stocks with market-beating returns with one month to go this year are the frontrunners to dominate the market in 2024.

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November is the fifth month out of 11 in which the TSX tasted positive month-to-month gains in 2023. Canada’s primary stock exchange is up by 5.51% year to date, much better than the 8.66% loss in 2022.

Technology is the best-performing sector, with its 52.02% year-to-date gain, although no one can tell how long it can sustain the momentum. However, if you seek TSX stocks that could dominate the market in 2024, Parkland (TSX:PKI) or Stantec (TSX:STN) are the frontrunners.

Substantial growth is coming

Parkland is preparing for what is coming, particularly full electric vehicle (EV) sales by 2035 to reduce road transportation emissions. The $7.7 billion fuel distributor and retailer is strengthening its EV charging network in British Columbia and planning to expand in other provinces such as Ontario and Quebec.

Its senior vice president for Energy Transition and Corporate Development, Darren Smart, said, “Our initial investments in EV charging have been positive. Strong customer utilization has validated our strategy to build scale in markets with tangible demand.”

Management recently announced securing $210 million in dedicated financing from the Canada Infrastructure Bank (CIB). The funding will support the continued multi-year growth of Parkland’s EV charging network. “Our financing agreement with Parkland paves the way for up to 2,000 public fast charging ports to come online across Canada,” said Ehren Cory, chief executive officer (CEO) of CIB.

RBC Capital Markets predicts robust growth of the EV market as prices stabilize and charging infrastructure expands. It also predicts hybrid vehicles will grow in popularity, but only in the near term. Once EV adoption takes off, the forecast is 75% market share by 2050.

Parkland expects cumulative available cash flow from 2024 to 2028 to reach $6 billion. It plans to use it to fund dividends, share buybacks, growth, and debt reduction. Beyond 2028, it will allocate capital toward opportunities that generate the greatest shareholder returns.

If you invest today, the share price is $43.88 (+52.3% year to date), while the dividend yield is a decent 3.1%. Parkland used to pay monthly dividends but changed the frequency to quarterly. Still, the stock hasn’t missed a payout since January 2017.  

Robust market demand

Stantec’s expertise is modernizing aging infrastructure and facilities in the private and public sectors. This $11.62 billion company provides engineering, architecture, and environmental consulting services. The strong demand in Canada and the U.S. contributed to the record results in the most recent quarter.

In Q3 2023, revenue and net income increased 14.9% and 52.8% to $1.69 billion and $103.9 versus Q3 2022. Stantec’s backlog at the end of the quarter reached $1.3 billion and $4.1 billion in the home country and across the border.

Stantec’s president and CEO, Gord Johnston, said, “Our backlog is at a near-record high level, and market demand continues to be robust, bolstering our optimism for ongoing strong growth in 2024 and beyond.” The industrial stock trades at $101.89 per share (+58.16% year to date) and pays a modest 0.77% dividend.

Market-beating returns

Parkland and Stantec have market-beating returns of over 52%, with only one month remaining in 2023. If they can outperform amid elevated volatility, imagine how high their prices will soar when the economic environment improves.

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 Christopher Liew 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.

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