The Toronto Stock Exchange registered a third straight record high on November 14, 2024. Canada’s primary equities benchmark continues to post significant gains (+10.06% in the last three months) aided by the rate-cutting cycle. Many stocks are on a roll, even outperforming the broad market and their sectors.
If you have $7,000 and an investment appetite, PHX Energy Services (TSX: PHX), Timbercreek Financial (TSX: TF), and BTB (TSX: BTB.UN) are the best Canadian stocks to buy right now. Besides the hefty gains thus far in 2024, all three small-cap stocks have high dividend yields. Hold them in a Tax-Free Savings Account (TFSA) to benefit from tax-free money growth and earn tax-free passive income.
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Energy
Energy was the top-performing sector on the record-setting day. Its year-to-date gain is +16.43% following Thursday’s +2.36% advance. However, the heavyweight sector’s gain pales compared to PHX Energy Services’s +26.17%. Moreover, at $9.57 per share, the dividend offer is a generous 8.6%.
The $424 million multinational company provides drilling services (directional and horizontal) and measurement technologies to oil and gas producers in Canada, the U.S., and Albania. Allied services include survey management and gyro surveying. PHX is growth-oriented and expects strong operations to be sustained throughout 2024 and into 2025.
PHX is not only a dividend payer but also a high growth stock. It placed 20th in the 2024 TSX30 List, ranking the top 30 performing companies.
Financial
Timbercreek Financial in the financial services sector outperforms Canada’s big bank stocks. At $9.02 per share, current investors are ahead 25.73% year to date and enjoy a lucrative 9.02% dividend. The best part is the monthly payout frequency. A $7,000 position will produce $631.40 in annual investment income.
The $635 million non-bank lender provides short-term (not more than five years) structured financing solutions to commercial real estate investors. Timbercreek has maintained a conservative portfolio risk, an attraction to risk-averse investors.
Falling interest rates are tailwinds for Timbercreek. Its chief executive officer (CEO), Blair Tamblyn, said additional rate cuts would strengthen market conditions and open financing opportunities.
Real estate
TSX’s real estate sector is slowly rising from a slump due to the high interest rate environment. BTB, in particular, outperforms with a market-beating 32.24% year-to-date return. Furthermore, at only $3.59 per share, you can partake in the juicy 8.38% (monthly payouts).
The $314.2 million real estate investment trust (REIT) owns and operates industrial (36.6%), suburban office (41.9%) and necessity-based retail (21.5%) properties. As of September 30, 2024, the occupancy rate from the long-term leases is 92.3%. The cumulative renewal rate (nine months) rose from 58.1% to 78.1%.
In the first three quarters of 2024, rental revenue increased 1.52% year over year to $97.3 million, while net operating income declined 0.28% to $56 million from a year ago. Michel Léonard, president and CEO of BTB, said the results reflect the portfolio’s organic growth and sound property management.
TFSA dollar limit
I mentioned a $7,000 investment amount because it is also the TFSA dollar limit for 2025, unchanged from last year. Furthermore, the cumulative or maximum lifetime limit of Canadians 18 or older as of December 31, 2009, has risen to $102,000 from $95,000.
