Stock investing is a risky undertaking because share prices constantly fluctuate. However, some TSX stocks have become legends for their resiliency and financial stability, notwithstanding market downturns.
Canada’s Big Five banks, led by the Royal Bank of Canada, have dividend track records of more than 100 years. Only legends can endure and quickly recover when the market stumbles. You can buy shares of these giant lenders and never sell.
Some market analysts say the current investment landscape is noticeably more volatile than in recent years. Nonetheless, two outperforming stocks today are legends in the making because of the nature of the businesses and visible long-growth runways.
Ag Growth International (TSX: AFN) and Valeura Energy (TSX: VLE) are future legends. Consider taking positions now and hold, if not keep, for decades.
Food infrastructure
The mission of Ag Growth International, or AGI, is to advance storage, handling, and processing solutions that strengthen the global food supply chain and eliminate food waste and hunger. This $1.2 billion Winnipeg-based company manufactures and sells equipment for the agriculture industry in North America and elsewhere.
The equipment and solutions that AGI and its subsidiaries provide support efficient storage, transport, and food processing globally. Production and product distribution are likewise efficient, given the 30 manufacturing facilities in Canada, the United States, Brazil, India, France, India, and Italy.
AGI’s two core segments, Farm and Commercial, ensure the connection between the farm and plate. The former monitors and facilitates the movement of grain after harvest, while the latter stores and moves grain through the food supply. In 2023, total revenue increased 4.7% year over year to a record $1.5 billion, while profit reached $68.9 million compared to a $50.6 million net loss in 2022.
Notably, the $500 million revenue from international businesses is 34% of total revenue and Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) grew 25% to $293.9 million from a year ago.
Besides the large and growing addressable market, demand for AGI products is sustainable because it is consumption-driven. At $63.40 per share (+25.8% year-to-date), the industrial stock pays a modest 0.97% dividend.
A transformed, cash flow-generating business
Valeura Energy is relatively cheap but has delivered enormous returns to investors. At $5.11 per share, the year-to-date gain is 79.9%, while the overall return in three years is 821.1%. If you invested $5,700 on April 1, 2021 ($0.58 per share), your money would have ballooned to $52,500 today.
The $527.9 million upstream oil and gas company invests in assets with substantial near-term cash flow and mid-term reinvestment opportunities. Valeura operates in the Thrace Basin of northwest Turkey and is growing through acquisitions in Southeast Asia, particularly Thailand.
In 2023, net income reached US$244.3 million on total revenue of US$438.2 million. The company incurred a net loss of US$13.6 million in 2022. As of December 31, 2023, the company is debt-free. Its President and CEO, Sean Guest, said Valeura Energy is now a transformed and strong cash flow generating business.
Future legends
Ag Growth International and Valeura Energy are potential multi-baggers in 2024 when the economy improves. Owing to their resilient business models, both are future legends, too.
