Many Canadian stocks have had a strong recovery in 2024. Yet, you might be surprised that the TSX Index is only up 1.4% for the year.
It simply means that there are still some good deals to be found. If you got $10,000 to invest today, here is a four-stock mini portfolio to consider for March.
Pembina Pipeline stock
It never hurts to have a little bit of income in any investment portfolio. Pembina Pipeline (TSX: PPL) is a solid bet if you want a safe, steady, and outsized dividend yield. Right now, it yields 5.7%.
Pembina operates a diverse mix of crucial energy infrastructure (pipelines, processing, midstream, and export facilities) across Western Canada. With this stock you get energy exposure, but the downside is protected due to its highly contracted earnings streams.
Pembina just announced record results that beat its guidance expectations for 2023. It generated substantial amounts of cash in the year.
Consequently, the energy transportation firm sits with an excellent balance sheet (especially when compared to peers). That provides some very good optionality to grow in 2024. There could be some good upside if it can continue to execute well.
EQB
EQB Inc. (TSX: EQB) is another interesting bet if you want a mix of income and value. EQB is known as Canada’s challenger bank because of its digital-first financial and lending platforms. It is Canada’s seventh largest bank.
However, the bank has been making significant strides to become a major player in Canada. In 2023, it increased assets under management by 16% to $119 billion. Revenues increased 27% and adjusted earnings per share rose 12%.
EBQ only pays a 1.65% dividend yield. However, it has grown its dividend by a 20% annualized rate for nearly a decade. Despite its impressive growth, it trades at a discount to the big Canadian banks, so there is room for a valuation re-rating as well.
BRP stock
Another value-play to consider buying in March is BRP (TSX: DOO). It is one the premier manufacturers of all-terrain and marine vehicles. The leader in recreational vehicles has renowned brands like Ski-Doo, Sea-Doo, and Can-Am.
2023 was a tough year for the company. It saw sales pullback considerably more than expected and consequently had to significantly revise its guidance. While the slowdown is concerning, the company has consistently been taking market share from peers.
BRP continues to innovate and has a manufacturing model that captures above average margins. DOO stock is extremely cheap at 7.5 times earnings. It has a history of buying back shares by around 5% a year. If it can continue to that, shareholders should do well even if growth moderates in the near-term.
WSP Global
WSP Global (TSX: WSP) may not be the cheapest stock on this list, but its recent results demonstrate that it is worth owning.
WSP just came out with year-end 2023 results. It grew net revenues by 22% and adjusted net earnings by 24%. Organic revenues were up by 7%. Margins improved by 150 basis points. Backlog hit a new record of $15 billion.
WSP has become a recognized leader around the world for consulting, engineering, design, and project management services. As it scales, it can offer more services to customers. Consequently, the more it scales, the more profitable it becomes.
The demand for infrastructure is huge and that should continue to propel demand for WSP’s services. This stock is a well-managed, strong compounder for a long-term investor.
