Soaring stocks might look like they’ve already taken off. But that doesn’t mean you’ve missed the boat. Often, a stock’s rise is based on strong fundamentals, like growing revenue or innovative products. And this means there’s still room for future gains. Plus, market momentum can last a long time. And savvy investors can benefit from long-term growth rather than chasing short-term highs. So, don’t stress; there’s still potential ahead! Especially with these three soaring stocks.
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IAG
Despite its recent climb, iA Financial (TSX: IAG) remains a strong buy due to several key factors that suggest continued growth potential. The company recently posted impressive Q2 2024 earnings, with earnings per share (EPS) of $2.75, beating expectations by $0.17. This demonstrates that iA is not only benefiting from short-term momentum but is solidly outperforming forecasts. Additionally, iA Financial has seen consistent revenue growth, with its Q2 revenue reaching $1.6 billion – a notable increase year over year. This strong financial performance is underpinned by sound fundamentals, including a manageable debt load and steady operating cash flow. And this positions the company well for future gains.
What’s more, iA’s valuation remains attractive, even with the stock’s recent rise. The stock is trading at a forward price/earnings (P/E) ratio of 9.5, thus indicating it’s still undervalued relative to its future earnings potential. The company’s forward annual dividend yield of 3%, along with its history of increasing dividends, adds to its appeal for income-focused investors. With analysts forecasting further earnings growth of around 16.8% per year, the stock is likely to keep its upward trajectory, thus making now a great time to invest before it climbs even higher.
WFG
Even after climbing in the last month, West Fraser Timber (TSX: WFG) remains a strong buy for several reasons. The company continues to show strong financial performance, reporting Q2 2024 revenues of $1.7 billion and beating analyst expectations of $1.6 billion. Although its EPS missed slightly at $1.20, the revenue growth of 6% year-over-year highlights the company’s resilience in challenging markets. West Fraser’s strategic investments in operational improvements, including the ramp-up of its Allendale mill, should also lower costs and enhance output in the coming years, further boosting profitability.
Furthermore, West Fraser’s strong balance sheet and consistent dividend growth make it attractive for long-term investors. The company raised its quarterly dividend to $0.32, providing a steady income stream, and its cash flow remains solid with $1 billion in reserves. Demand for wood products is expected to remain stable and costs in key areas like energy and resin are projected to stabilize. Therefore, West Fraser is well-positioned for continued growth. This combination of solid revenue growth, operational efficiency, and stable dividends makes WFG an appealing investment, even after its recent surge.
TRP
Even after its recent climb, TC Energy (TSX: TRP) remains a strong buy due to its solid financial performance and strategic initiatives. In Q2 2024, the company reported strong results, including $2.7 billion in comparable earnings before interest, taxes, depreciation and amortization (EBITDA). This reflects healthy year-over-year growth. Plus, net income attributable to common shares soared to $1 billion, a significant increase from last year. These robust earnings showcase the company’s ability to perform even in a challenging energy market, driven by its leadership in the North American natural gas infrastructure sector.
TC Energy is also actively working on improving its financial position with a $3 billion asset divestiture program. This includes the recent sale of its Portland Natural Gas Transmission System for $1.1 billion. Along with the upcoming spin-off of its Liquids Pipelines business into South Bow Corporation, these should strengthen its balance sheet and create additional growth opportunities. Moreover, with a forward P/E ratio of 14.4 and a solid dividend yield above 6%, TRP offers both value and income for investors, especially those looking to capitalize on the company’s future growth potential.
