For every investor, the list of favourite stocks might expand or contract based on market conditions. Some stocks might be on that list that they would buy regardless of the market conditions, but others might be seasonal favourites. For July 2024, my list of favourites includes the following five stocks.
A fuel cell company
Ballard Power Systems (TSX:BLDP) is a prominent name in the fuel cell industry and offers a good alternative to classic ESG (environmental, social, and governance) investing options like renewable energy and electric vehicles (EVs). Its technology relies on hydrogen as a fuel and converts it into electricity for use, essentially eliminating the need for batteries.
The company has managed to remain financially healthy without incurring significant debt. So, when the market conditions are right (like hydrogen prices going down), this relatively unencumbered stock might shoot to new heights.
A real estate essential service company
FirstService (TSX:FSV) is one of North America’s largest real estate essential services companies and the biggest manager of residential communities, overseeing millions of housing units. It’s listed in both Canada and the U.S., and the bulk of its business is across the border. It has an impressive footprint and a diversified enough business to make it resilient against various economic weaknesses.
FirstService is a consistent and reliable dividend payer that has grown its payouts consistently since its inception, earning it the title of an Aristocrat. While the payout ratio and dividend growth are reasons enough to buy this stock for dividends, the yield is barely passable at 0.66%. One factor influencing the yield is its growth, which, even though it has slowed down quite a bit, may experience a resurgence.
An alternative financial company
While most Canadians lean towards more conservative financial stocks for dividends (and for growth) — i.e., banks — alternative financial companies like goeasy (TSX:GSY) might prove better or at least comparable picks on both fronts. It’s an alternative lender focusing on people with weak credit.
From a dividend perspective, goeasy is an established Aristocrat with a compelling dividend-growth record and a modest yield of 2.6%. But it’s also a fairly valued growth stock that grew 230% in the last five years. Right now, it’s modestly discounted, partly because of an upcoming change in leadership (with its chief executive officer retiring).
A mortgage company
If you are looking for a more substantial income producer instead of low-yield Aristocrats, MCAN Mortgage (TSX:MKP) is a stock worth considering. This small mortgage company is offering a mouthwatering yield of about 9.6% right now when it’s trading at a less than 10% discount from its five-year peak.
Valuation is another point in MCAN’s favour, as it’s trading at a price-to-earnings ratio of just 7.3. The growth potential is modest at best, but the chances of losing your money are quite low, making it a reasonably healthy pick.
A telecom company
Telus (TSX:T) is one of the country’s three telecom giants and one of the best 5G stocks. It offers a healthy combination of dividend and growth potential, especially at its current discounted state (38% down). The yield has jumped to 7.6%.
Telus also has a more diverse business model, where telehealth and smart home security are also prominent domains in addition to the classic real estate ones.
Foolish takeaway
The five stocks are among the best you can buy right now, especially if you are optimistic about the long-term performances and return potential of the stocks and a healthy progression of the underlying businesses.
