Want to Beat the Market? 2 Stocks to Watch

These top Canadian stocks have not only outperformed the broader market so far in 2024 but also have the potential to continue delivering solid returns in the long run.

| More on:

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

The Canadian stock market has gone up by nearly 10% so far in 2024, as investors continue to bet that declining interest rates in the country are likely to boost economic activity and consumer spending in the coming years. These factors could directly lead to an increase in corporate profits. This is one of the key reasons why many TSX-listed consumer and industrial stocks have outperformed the broader market on a year-to-date basis.

However, to beat the market, it’s important to look beyond the short-term gains and look for stocks with strong financial growth prospects that could deliver solid returns over the longer term. In this article, I’ll talk about two rallying Canadian stocks you may want to add to your watchlist right now and buy on a dip to benefit from their long-term growth potential.

NFI Group stock

If you don’t know it already, NFI Group (TSX:NFI) is a Winnipeg-headquartered company that primarily focuses on manufacturing buses and motor coaches, including electric and hybrid buses, for public transit systems and commercial enterprises. In 2024 so far, NFI stock has rallied by more than 40%, outperforming the TSX Composite benchmark by a wide margin. With this, it trades at $19.19 per share with a market cap of $2.3 billion.

The recent optimism in NFI stock could be attributed to its solid operational and financial results for the second quarter of 2024. During the quarter, the company’s total revenue rose 28.9% YoY (year over year) to US$851 million. Its deliveries last quarter jumped 34% from a year ago to 1,246 equivalent units, including 23% of zero-emission buses.

Created with Highcharts 11.4.3NFI Group PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

On the profitability side, the Canadian bus manufacturer also registered a turnaround by reporting an adjusted quarterly net profit of US$3.1 million. This not only reflected a big improvement over its adjusted net loss of US$35.2 million in the second quarter of 2023 but also beat Street analysts’ expectations of a US$2.9 million loss.

As NFI continues to focus on ramping up its production further to support its robust backlog of orders, I expect its share price to continue outperforming the broader market by a wide margin in the future.

Loblaw stock

Loblaw Companies (TSX:L) could be another rallying Canadian stock you may want to add to your watchlist right now. This Brampton-based retail giant operates a large network of supermarket and pharmacy chains across the country. It has a market cap of $52.6 billion as Loblaw’s TSX-listed stock trades at $172.31 per share after climbing by 34.3% year to date.

While recent weakness in consumer spending has affected the financial growth of many retail companies, Loblaw’s diversified business continues to perform well. In the last 12 months, its sales rose 3.8% YoY to $60.3 billion. More importantly, its adjusted earnings during the same period soared by 12% YoY to $8.13 per share.

As Loblaw continues to focus on its drug retail segment and e-commerce growth, its profitability could improve further in the coming years, making it an attractive stock to buy on the dip and hold for the long term.

Should you invest $1,000 in Loblaw Companies right now?

Before you buy stock in Loblaw Companies, 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 Loblaw Companies 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.

The Motley Fool recommends NFI Group. The Motley Fool has a disclosure policy. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

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 Stocks for Beginners

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 »

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 »

rain rolls off a protective umbrella in a rainstorm
Dividend Stocks

Economic Headwinds: Should You Still Consider Buying the Dip?

A market dip might seem like a bumpy road, but it can be far smoother in the future with the…

Read more »

calculate and analyze stock
Stocks for Beginners

Stagflation Survivors: An Investment Strategy for Today’s Market Dip

During the market dip, there are ways to keep yourself safe and settled. So, let's get into them.

Read more »

dividends can compound over time
Stocks for Beginners

Inflation Fighters and the Opportunity to Buy the Dip

Inflation continues to be a struggle, but there are ways to battle during this market dip.

Read more »

trends graph charts data over time
Stocks for Beginners

Recession Stocks Are Back: Time to Buy the Dip This April?

During a recession, it's the best idea to go with stocks that have long-term opportunity ahead -- like these two.

Read more »

A woman shops in a grocery store while pushing a stroller with a child
Dividend Stocks

Dip Buyers Could Win Big in Today’s Market Dip

If you want to buy the dip, think long-term. Which is why this TSX stock is a top option.

Read more »