2 Stocks I’d Avoid in 2024

Are you looking for stocks to buy in 2024? Well, perhaps keep these off your list — at least for now.

| More on:
Caution, careful

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

When it comes to investing, many Canadians likely are flooded with what they should buy. But what about the stocks that they should avoid? Today, we’re going to get in that, and look at some of the biggest companies that may not do so well the rest of this year. So, let’s get into it.

Suncor stock

Created with Highcharts 11.4.3Suncor Energy PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

It used to be that one of the best stocks for dividends and returns was Suncor Energy (TSX:SU). Yet, times have certainly changed. Firstly, the oil industry is under significant pressure from increased environmental regulations and a global shift towards renewable energy. This transition diminishes the long-term growth prospects for traditional oil companies like Suncor.

And volatility is already there. For the first quarter of 2024, Suncor Energy reported net earnings of $1.61 billion, or $1.25 per common share, which represents a decrease from the $2.05 billion, or $1.54 per share, reported in the same period the previous year. Despite beating analyst expectations with an earnings per share (EPS) of $1.41 (versus the expected $1.23), the net income has shown a significant year-over-year decline.

Furthermore, Suncor’s performance is highly sensitive to fluctuations in oil prices. Any economic downturn or geopolitical instability can severely impact oil prices, leading to volatility in Suncor’s stock. The combination of these factors makes Suncor a riskier investment choice in the current market environment. Even with a 4.23% dividend yield.

CT REIT

Created with Highcharts 11.4.3Ct Real Estate Investment Trust PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Another company investors may want to avoid for now is CT REIT (TSX:CRT.UN). This real estate investment trust has faced significant declines due to rising interest rates, which have impacted property values. Although it provides steady distributions, the overall market environment poses challenges for its growth.

As a real estate investment trust (REIT), CT REIT’s value is closely tied to its property portfolio, which has suffered due to these market conditions. While it offers a 7% distribution yield, the potential for further declines in property values and ongoing interest rate highs pose significant risks to its future performance.

Shares are now down 11% in the last year alone, though with some earnings improvement. Net operating income (NOI) increased by 5.6% to $113.5 million compared to the same period in 2023. Funds from Operations (FFO) rose by 3.8% to $78.2 million, and adjusted funds from operations (AFFO) grew by 4.9% to $72.6 million. These improvements were driven by higher property revenues and increased recovery of capital expenditures despite higher interest expenses. The REIT also announced a 3.0% increase in distributions, reflecting its robust financial health.

Yet, with higher interest rates still on hand for a company that remains quite dependent on retail locations, it might be best to avoid for now.

Bottom line

Overall, there are reasons enough to avoid both of these stocks. Investors should avoid Suncor Energy in 2024 due to its vulnerability to fluctuating oil prices and the broader industry’s shift towards renewable energy. Environmental regulations and geopolitical instability also add significant risk, impacting Suncor’s long-term growth prospects and making it a less attractive investment.

Furthermore, CT REIT faces challenges due to high interest rates, which have negatively affected property values. Despite solid recent earnings, the overall market environment poses risks to its future performance. The decline in real estate market stability and higher interest expenses make CT REIT a cautious investment choice.

Should you invest $1,000 in BCE right now?

Before you buy stock in BCE, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and BCE wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Investing

A shopper makes purchases from an online store.
Tech Stocks

Buy the Dip on the Return of Recession Stocks?

If a recession comes back, there are some stocks that could fair well afterwards. And this is one of the…

Read more »

RRSP Canadian Registered Retirement Savings Plan concept
Retirement

Here’s the Average Canadian TFSA and RRSP at Age 60

Many Canadian retirees have tens of thousands invested in ETFs like the iShares S&P/TSX 60 Index Fund (TSX:XIU).

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

Here’s Exactly How a $20,000 TFSA Could Potentially Grow to $200,000

Index funds like the iShares S&P/TSX Capped Composite Index (TSX:XIC) are tax free in a TFSA.

Read more »

dividend growth for passive income
Investing

5 Canadian Growth Stocks to Buy and Hold for the Next 15 Years

These Canadian stocks have tremendous long-term growth potential, making them five of the best investments you can buy and hold…

Read more »

Man holds Canadian dollars in differing amounts
Stocks for Beginners

Cash Is King? Think Again During Today’s Market Dip

Sure, cash is great, but during a market dip investors may want to consider using some of the cash to…

Read more »

grow money, wealth build
Stocks for Beginners

How I’d Build a $15,000 Portfolio for Income and Growth With Canadian Value Stocks

Looking for some Canadian value stocks to buy without breaking the bank? Here's a trio to consider buying this month.

Read more »

Dividend Stocks

How I’d Invest $6,000 in Canadian Real Estate Stocks to Build Lasting Wealth

Canadian REITs on sale! See how grocery-anchored retail properties offering 9% yields could turn $6,000 into lasting wealth despite US…

Read more »

Piggy bank with word TFSA for tax-free savings accounts.
Investing

3 Canadian Value Stocks I’d Hold in My TFSA Through Market Volatility

Given their healthy growth prospects and discounted stock prices, these three value stocks would be ideal additions to your TFSA.

Read more »