Earnings season has arrived, and this can be quite overwhelming. After such a lull, suddenly, we’re flooded by information, all while geopolitical issues and economic uncertainty abound.
But today, we’re looking at just three TSX stocks that offer a strong future. And what’s more, they offer a strong present and past as well. With that in mind, let’s look at the top TSX stocks I would consider buying in August.
A&W
Shares of A&W Revenue Royalties Income Fund (TSX: AW.UN) popped by 20% this week as the company announced it would change its structure. While this was all done in the name of creating value, even more was already there.
A&W Revenue Royalties Income Fund has shown robust financial performance. In the first quarter of 2024, the fund reported earnings per share (EPS) of $0.43. This was up from $0.37 in the same period of 2023. The fund’s net income for 2023 was $32 million, demonstrating consistent profitability.
Investors looking for steady income will appreciate A&W’s reliable dividend payouts. The fund declared a cash distribution of $0.16 per unit for June 2024. This maintained a steady flow of income to its unitholders. With a current yield of around 6.73%, A&W offers a compelling dividend yield compared to many other investment options.
Sleep Country
Another big move this week came from Sleep Country Holdings (TSX: ZZZ) with the announcement it would be bought up by Fairfax Financial Holdings. Fairfax Financial Holdings announced the acquisition of Sleep Country Canada for $35.00 per share. A significant premium over its recent trading price. This acquisition not only underscores the intrinsic value of Sleep Country. It also positions it for further growth under the management of Fairfax — a company known for its strategic investments and operational expertise.
So, why does this company want it? Sleep Country has demonstrated consistent financial performance. For the fiscal year ending 2023, the company reported annual revenues of $938.26 million — a modest increase from the previous year. Despite a challenging retail environment, Sleep Country managed to maintain a net income of $68.60 million. This reflects its ability to generate stable earnings.
As the leading retailer of mattresses and sleep-related products in Canada, Sleep Country is well-positioned to capitalize on the growing demand for high-quality sleep products. The company’s extensive product range, including mattresses, bedding, and sleep accessories, caters to a broad consumer base. Furthermore, Sleep Country’s strategic initiatives, such as expanding its product offerings and enhancing its e-commerce platform, are expected to drive future growth.
VXC ETF
Finally, let’s make it simple with an exchange-traded fund (ETF). Vanguard FTSE Global All Cap ex Canada Index ETF (TSX: VXC) is an excellent investment choice for those looking to diversify their portfolios globally while maintaining exposure to a wide range of market caps and regions.
VXC ETF is an excellent investment choice for those looking to diversify their portfolios globally while maintaining exposure to a wide range of market caps and regions. The ETF has delivered solid returns, with a total return of 22% over the past year. Plus, it holds an attractive 1.53% dividend yield.
VXC’s holdings are well-diversified across various sectors and regions. The fund’s largest allocations are to the technology sector (21%), consumer discretionary (13.9%), and financials (13.7%). Geographically, 61.3% of its assets are allocated to U.S.-listed companies, with significant exposure to other markets like Japan, the U.K., China, and emerging markets. So, you get everything from the biggest stocks out there to the far lesser known. Altogether, it’s a clear winner as a buy in August.
