Canadian investors are now halfway through May. And not only that, we’re now about halfway through another round of earnings. And there have been countless companies that have been producing strong earnings reports. However, if you have $10,000 to invest in May, there are three I would focus on first and foremost, each for their own special reason.
Royal Bank
First off, there’s Royal Bank of Canada (TSX:RY). Granted, the largest of the Big Six banks by market cap has yet to come out with earnings. However, it’s likely to continue its progress to providing stability through provisions for credit losses (PCL) as well as growing its revenue.
That revenue in particular comes from two places. First, there’s its stable wealth and commercial management arm, which has long been a highly lucrative part of the business. However, it also comes from its new acquisition of HSBC Canada.
Now that the acquisition is on board for the quarter, the company should see a large rise in revenue from new clients — clients that are, in many cases, high-income newcomers to Canada. So, with shares up 12% in the last year and rising, and a 3.85% divided yield, it’s looking like a strong purchase in May.
Lightspeed
Then there’s a company for growth. And in a recent interview with Motley Fool, now permanent chief executive officer Dax Dasilva has confirmed that’s exactly where the company is focused.
Lightspeed Commerce (TSX:LSPD) stock came out with its fourth-quarter earnings and full-year 2024 results that climbed past estimates. However, the company is now shifting away from its focus on payments penetration, now that a solid 32% of its revenue comes from this operation. Now, it’s focusing back on subscription growth, which shareholders have been begging for.
So, after shares rose 15% on the back of strong earnings and the promise of more growth, it finally looks like a good time to get back in Lightspeed stock, especially as we head towards some historically strong quarters, which we’ve seen usually happens in the summer months. And while shares still remain at around $20 per share, far lower than all-time or even 52-week highs.
XAW ETF
Finally, if you’re looking for a simple, core investment with that $10,000, I would consider an exchange-traded fund (ETF). In particular, iShares Core MSCI All Country World ex Canada Index ETF (TSX:XAW) is an excellent choice.
That’s because if you’re like most Canadians, you likely invest a lot in Canadian companies. There’s nothing wrong with that, except if you’re missing out on global diversification. Which is why XAW ETF is the perfect option.
XAW ETF holds all market caps of companies across the world. You get exposure to developed countries as well as emerging markets. Altogether, you can look forward to growth as well as the dividends provided by these companies.
Right now, shares are up 13% year to date already and about 24% in the last year as of writing. Meanwhile, it offers a 1.58% dividend yield. So, it’s definitely another of the companies to consider in May.
