Predicting the next stocks to “pop” often involves analyzing key indicators. These can include earnings surprises, where stocks can see a 5-10% price increase after outperforming expectations! Plus, there is high short interest, which may lead to short squeezes and rapid price spikes of 20% or more. Stocks breaking through technical resistance levels or in momentum-driven sectors can also experience gains of 2% to even 20% in a short period.
Furthermore, stocks, even just rumoured to be acquisition targets, often jump by 10-20% on the news. While these factors can signal potential short-term gains, they come with significant risk, and careful research and diversification are essential. So, let’s get into two stocks that offer more pop and less risk.
Two stocks to watch
If you’re on the lookout for dividend stocks with serious potential to “pop” on the TSX, goeasy (TSX:GSY) and Loblaw Companies (TSX:L) should definitely be on your radar. These two companies are not just solid dividend payers. They’re also positioned for growth, making them excellent candidates for your portfolio. Let’s break down why these stocks are ready to shine.
goeasy
goeasy is a financial services powerhouse that’s been quietly building a reputation as a dividend gem. With a current dividend yield of 2.52% and a price-to-earnings (P/E) ratio of 12.26, GSY offers a compelling mix of income and value. The company has been delivering strong earnings, with the most recent quarter showing revenue growth of 17% year over year, reaching $210.6 million.
Despite some volatility, GSY’s stock price has been on a solid upward trajectory, and analysts have a target estimate of $233.89, suggesting there’s plenty of upside left. For dividend investors looking for a combination of yield and growth, GSY is a stock that could be ready to pop.
Loblaw
Loblaw, however, is a household name in Canada with a growing presence in the healthcare sector. While it’s traditionally known as a retail giant, Loblaw has been expanding its footprint in healthcare services, which is a growth area that could significantly boost its earnings in the coming years. The company’s current dividend yield of 1.24% might not seem massive, but with a P/E ratio of 25.39 and a strong earnings per share (EPS) of 6.61, Loblaw’s stock offers stability and potential for growth. The stock is trading close to its 52-week high, reflecting strong investor confidence, and with an earnings date set for mid-November, there could be more good news on the horizon.
What makes Loblaw particularly exciting is its strategic push into healthcare. This move not only diversifies its revenue streams but also positions the company to capitalize on the growing demand for healthcare services. As Canada’s population ages, this sector is expected to see significant growth, and Loblaw is well-positioned to benefit. This diversification could lead to stronger earnings growth in the future. This makes it a compelling play for investors looking for both income and capital appreciation.
Bottom line
Both GSY and Loblaw have demonstrated resilience in their respective markets. The focus on growth sectors of financial services and healthcare make them particularly attractive. For GSY, the combination of a solid dividend yield and strong earnings growth potential sets the stage for a stock price rally. Meanwhile, Loblaw’s expansion into healthcare adds a layer of growth potential that complements its stable retail operations.
In summary, these are two dividend stocks that are not just about paying out steady income. These stocks are about to pop due to their strategic growth initiatives and solid financial performance. Whether you’re looking for a high-growth financial stock or a stable retail giant with a healthcare twist, these two companies offer something for every dividend investor.
