Investors can create wealth, generate dependable dividend income, and achieve long-term financial goals by consistently investing in top-quality stocks. Thankfully, the TSX has several such fundamentally strong stocks with the potential to deliver solid returns over time. Moreover, some of these Canadian stocks also offer reliable dividends.
So, if you are ready to invest $5,000, here are three stocks to buy in June 2024.
Lightspeed
Trading at a next 12-month (NTM) enterprise value/sales (EV/sales) multiple of 1.4, Lightspeed (TSX:LSPD) stock is too cheap to ignore near the current levels. While shares of this technology company are trading at a significant discount compared to the historical average, Lightspeed’s fundamentals remain strong. The company is well-positioned to deliver durable revenue growth and will likely achieve profitability soon.
Lightspeed offers a commerce-enabling platform and is well-positioned to benefit from the shift towards omnichannel platforms. The adoption of its payment solutions is expected to increase as more merchants upgrade their traditional payment systems and invest in technological advancements.
While the company will benefit from the ongoing digital shift, its strategic focus on expanding its customer base with high gross transaction value (GTV) augurs well for growth. It’s worth noting that these high GTV customers are more likely to adopt Lightspeed’s multiple modules, thus boosting its average revenue per user (ARPU) and reducing churn. Further, Lightspeed is integrating payments into its software platform, which will enable it to improve unit economics and drive margins.
Beyond organic growth, Lightspeed’s focus on accretive acquisitions will likely expand its customer locations and strengthen its competitive positioning.
In summary, Lightspeed’s low valuation, improving ARPU, growing high-value customer base, and focus on delivering sustainable earnings make It a compelling stock to buy now.
Dollarama
Investors could consider buying Dollarama (TSX:DOL) stock. The discount retailer consistently generates solid sales and earnings regardless of the market conditions. Thanks to this growth, Dollarama stock has outperformed the benchmark index by a wide margin. Also, the retailer enhances its shareholders’ returns through higher dividend payments. These attributes make Dollarama a solid stock for investors seeking growth, stability, and income.
Dollarama offers a diverse range of products at low, fixed prices. This value pricing attracts customers in all economic conditions, resulting in solid sales and earnings growth. Thanks to its growing earnings base, Dollarama has raised its dividend 13 times since 2011. Moreover, the stock has gained over 747% in the past decade.
In the future, Dollarama’s value pricing strategy and growing store base will drive its top line. Further, leverage from higher sales, direct product sourcing, and focus on efficiency will cushion its earnings and dividend payments.
Canadian Natural Resources
Shares of the oil and gas company Canadian Natural Resources (TSX:CNQ) could be another solid bet for generating capital gains and earning consistent dividend income. Canadian Natural Resources stock has grown at a compound annual growth rate of more than 30% in the last five years, delivering an overall return of over 275%.
Besides solid capital gains, the energy company has enhanced its shareholders’ returns by rapidly growing its dividend. For example, Canadian Natural Resources has increased its dividend at a CAGR of 21% in the past 24 consecutive years.
The company’s high-value reserves and long-life assets position it well to generate strong financials. Moreover, the company’s low maintenance capital requirement, stringent cost-control measures, and focus on strengthening its balance sheet and reducing debt bode well for growth.
