From the middle of 2022 to almost the entire of 2023, the TSX has fluctuated quite heavily. In the last year, we saw the market dip and recover several times, while the year ended with a sizable decline. However, 2024 looks different and more optimistic for the TSX. The index has increased 6%, and we are about a quarter into the year.
A market-wide recovery means many stocks that experienced a rough 2023 might be on their way up now. And while there are a lot of choices, there are two stocks you may consider looking into before others.
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A gold stock
While the relationship is typically inverse between the stock market and gold prices, the latter has also been going up at a healthy pace for some time now. This makes it the perfect opportunity for gold mining stocks that have been struggling for some time now to make a powerful recovery under both a bullish market and a bullish sector. One such candidate is B2Gold (TSX: BTO).
This low-cost senior gold producer has been going down since April 2022 and, so far, has lost over 37% of its valuation. The bulk of this loss happened in 2023. But the stock has started riding the new bullish winds and increased about 17% since March. It may continue to go up for some time now, especially if gold prices keep rising.
Apart from the recovery-fueled growth the stock is currently experiencing, the most compelling reason to buy this stock is its generous yield of 5.8%. But there is also a slight risk factor you may have to consider – a highly inflated yield. Though a couple of quarters of good returns may normalize that, especially considering the current gold prices.
A telecom giant
The year 2023 wasn’t a particularly bad year for telecom giants like Telus (TSX: T). The stock continued to fall for the bulk of the year, thanks to the bearish momentum that started in 2022. However, the year ended on a relatively dangerous note, with regulatory bodies bearing down on the sector. This resulted in another slump, and as a result, Telus has slumped almost 9% since the beginning of 2024.
However, there are at least two reasons to feel optimistic about the stock’s future this year. The first is the bullish market and positive market sentiment, which may impact the stock’s performance. Second, any positive news on the regulatory front can turn the sentiment in favour of telecom stocks.
In the long term, even though Telus is not the best 5g stock on the TSX, it has considerable reach. So once IoT gains solid traction, and enough devices (that rely upon telecom companies and their 5g technology to function) come online, the business may experience a significant boost.
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Foolish takeaway
Like B2Gold, Telus also offers a generous yield of close to 7%, thanks to the discount. While it’s not recovering right now, the tide may turn shortly. So, buying the two stocks now, when they are either recovering or heading in the right direction, can help you lock in a solid yield before you take advantage of the capital appreciation potential they are about to offer.
