3 Top TSX Stocks I’m Buying in August

Are you looking for an easy win in August? These three TSX stocks can give you everything from headline makers to stable passive-income producers.

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.

Fool contributor Amy Legate-Wolfe has positions in Vanguard Ftse Global All Cap Ex Canada Index ETF. The Motley Fool has positions in and recommends Fairfax Financial. The Motley Fool recommends A&w Revenue Royalties Income Fund. The Motley Fool has a disclosure policy.

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