Canadian stocks, which experienced a downturn in 2022, have shown promising signs of recovery as 2023 draws to a close, especially in the fourth quarter. This resurgence in investors’ confidence can be largely attributed to the growing anticipation that central banks in both the United States and Canada could cut interest rates in the near future. This is one of the key reasons why the main TSX index has inched up 9.3% since the end of October.
However, if inflationary pressures persist, the possibility of central banks delaying these rate cuts can’t be ruled out completely. Considering that, it’s a good time for investors to think about adding some stable, fundamentally strong stocks to their portfolios for 2024. These safe stocks, which are known for their solid business models, can provide a sense of security in uncertain macroeconomic times.
In this article, I’ll talk about two of the safest TSX stocks to buy for 2024, focusing on those with a years-long, proven track record of reliability and strength. Let’s begin.
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goeasy stock
goeasy (TSX:GSY) is the first in my list of TSX safe stocks to buy for 2024. In simple words, goeasy mainly focuses on providing nonprime leasing and lending services to consumers, especially those who might not have easy access to traditional banking services for various reasons. That’s why much of its customer base may include people with less-than-perfect credit scores or even people who need small loans that big banks might not consider.
The Mississauga-based company has a market cap of $2.6 billion, as its stock trades at $157.58 per share after rallying by 48% so far in 2023. With this, GSY stock has outperformed the market index by a big margin. Interestingly, goeasy stock has yielded around 894% positive returns in the last 10 years, excluding its dividends. At the current market price, it offers a 2.4% annualized dividend yield.
After its earnings rose 10.7% YoY (year over year) in 2022, goeasy’s earnings growth trend has further improved in 2023 so far. In the first three quarters of 2023 combined, the company’s adjusted earnings rose 19.9% YoY to $10.19 per share with the help of a 22.2% increase in its total revenue.
As the economic outlook is expected to improve in the coming quarters with central banks gearing up to cut interest rates, the demand for goeasy’s financial services is likely to strengthen further, which could help its share prices rally.
Dollarama stock
Dollarama (TSX:DOL) is another reliable TSX stock that you can consider betting on for 2024. The Mont Royal-headquartered company runs a chain of discount stores across Canada and has a market cap of $26.3 billion. Its stock currently trades at $ 93.34 per share after advancing by nearly 18% in 2023. In the last 10 years, DOL stock has risen 540%, supported by its strengthening financial base.
In the first three quarters (ended in October) of its fiscal year 2024, Dollarama’s adjusted earnings have jumped 30.3% YoY with the help of a more than 18% increase in revenue. For its fiscal year 2024, the company has announced a dividend of about $0.28 per share, reflecting a 28% YoY increase.
The demand for the company’s value products tends to remain high even in challenging economic conditions, which makes it a safe stock to hold for the long term. In addition, Dollarama is continuing to expand its store network, which should accelerate its financial growth further in the coming years.
