So far, 2024 has been a pretty strong year for Canadian stocks. The TSX Index is up nearly 5% just in the past three months alone. That is masking the fact that some stocks (especially technology and growth stocks) have risen over the market by a factor of three to five times.
Valuations have risen, and there are not as many bargains in the market right now as this time last year. Yet, if you are willing to dig a little deeper, there are still attractive stocks you can buy today. If you have $1,000 to invest, here are three stocks that are interesting right now.
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A top Canadian energy stock ready to recover
Tourmaline Oil (TSX:TOU) is the largest natural gas producer in Canada. It is in the top four for conventional liquids production as well. Natural gas has recently been trading at a multi-year low. This has affected market sentiment for Tourmaline stock.
Despite that, the company has continued to generate good cash flows. It raised its base dividend in the fourth quarter. It also announced a special $0.50 per share quarterly dividend. It plans to pay more special dividends through the year.
The good news is that natural gas generally does not trade this low for long. It tends to have a quick recovery from the bottom. Supply could tighten quicker than many expect given geopolitical tensions globally. Likewise, factors like LNG Canada coming to completion and rising power demand could help push prices up.
As a result, Tourmaline could start to see good upside in cash flows, especially in the back half of the year. The company has committed to delivering most of its cash flows to shareholders.
If you are patient, there are likely more chunky special dividends in the years ahead. For a well-managed energy company with a strong balance sheet and good potential upside, Tourmaline is a great bet today.
Growth at a reasonable price (GARP) stock
Another stock that appears to be undervalued is Calian Group (TSX:CGY). This stock is down 12% over the past year. Its stock performance does not seem to represent the fundamental improvements in its business.
Calian provides diversified services for private, institutional, and government clients. It made two major acquisitions last year that are expected to start contributing margin and profit growth. Right now, Calian is guiding to grow revenues by +10% and earnings by +25%.
It is looking to accelerate its acquisition pipeline in the coming years. Yet, this stock only trades with a price-to-earnings (P/E) ratio of 12. That is a discount to other Canadian serial acquirers, and it seems like a discount to its attractive growth prospects.
A top retailer that took a dip
Alimentation Couche-Tard (TSX:ATD) is down nearly 10% over the past month. It presents a chance to dip your toe in this quality compounder stock.
Certainly, the stock is down for a fair reason. It delivered negative organic growth and disappointing earnings in its most recent quarter. U.S. consumers have pulled back on discretionary purchases (like cigarettes), and that has impacted results.
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While this may be a near-term challenge, the company continues to have a strong long-term trajectory. It just added a major store portfolio in Europe. It is starting to see more acquisition opportunities coming to the table.
This company is exceptionally well-managed and has an excellent record of capital allocation. You can buy it at a slight discount today if you can look past some short-term challenges.
