Investing in the stock market requires a thorough understanding of each company’s financial health, performance history, and future prospects. But where do you start? Today, we’re looking at the best of the best with an in-depth look at five prominent TSX stocks that are currently strong buys.
1. Shopify
Shopify (TSX:SHOP), headquartered in Ottawa, has solidified its position as a leading e-commerce platform. Enabling businesses worldwide to establish and manage online stores. In the third quarter of 2024, Shopify stock reported a 26% year-over-year revenue increase, reaching $2.16 billion, surpassing analysts’ expectations.
This growth is attributed to the TSX stock’s innovative tools, including the artificial intelligence (AI)-powered assistant Sidekick, which assists merchants with sales reports and customer data analysis. Shopify’s strategic focus on attracting larger enterprises aims to secure more stable revenue streams and long-term growth. With the continuous rise of e-commerce and Shopify’s commitment to technological advancement, the TSX stock is well-positioned for sustained expansion.
2. Royal Bank of Canada
As Canada’s largest bank, Royal Bank of Canada (TSX:RY) has demonstrated resilience and adaptability. In the fourth quarter of 2024, RBC reported a 17.7% increase in adjusted net income, totalling $4.44 billion. Driven by the acquisition of HSBC’s Canadian operations and strong performance in its wealth management division.
The $10 billion acquisition added approximately 780,000 clients, enhancing RBC’s retail and commercial business. The wealth management division saw a significant rise in net income, reaching $969 million, aided by higher fees and recovery from previous impaired losses. RBC’s strong capital position, with a common equity tier-one (CET1) ratio of 14.9%, and a history of consistent dividend payments make it an attractive option, especially for investors seeking both growth and income.
3. Enbridge
Enbridge (TSX:ENB) is a leading energy infrastructure TSX stock in North America, operating an extensive network of pipelines and renewable energy projects. In the third quarter of 2024, Enbridge’s profit more than doubled from the previous year, reaching $1.29 billion, driven by contributions from U.S. gas acquisitions and improved organic growth opportunities.
The TSX stock has forecasted higher core profits for 2025, anticipating adjusted core earnings between $19.4 billion and $20 billion, up from 2024. Enbridge’s commitment to transitioning towards greener energy solutions is evident in its investments in renewable energy assets. With a strong dividend yield and a strategic focus on sustainable energy, Enbridge offers investors a blend of income and long-term growth potential.
4. TD stock
Toronto-Dominion Bank (TSX:TD) is one of Canada’s major financial institutions, offering a wide range of banking services. However, in the fourth quarter of 2024, TD reported a decline in profit. Primarily due to challenges in its U.S. operations linked to anti-money-laundering issues, resulting in a $3 billion penalty and an asset cap imposed by U.S. regulators.
Despite these setbacks, TD’s diversified business model, encompassing retail banking, wealth management, and wholesale banking, provides a solid foundation. The TSX stock’s strategic expansion into the U.S. market has enhanced its growth prospects. And its commitment to digital innovation positions it well for future opportunities.
5. Bank of Nova Scotia
Commonly known as Scotiabank, Bank of Nova Scotia (TSX:BNS) has a significant international presence, particularly in Latin America. In the fourth quarter of 2024, Scotiabank reported higher profits, attributed to lower provisions for potential loan losses and higher interest income.
The TSX stock’s international operations offer unique growth opportunities, and its focus on digital transformation aims to enhance customer experience and operational efficiency. With a solid dividend history, Scotiabank provides a balanced mix of growth and income for investors.
Bottom line
Shopify, Royal Bank of Canada, Enbridge, Toronto-Dominion Bank, and Bank of Nova Scotia each present compelling investment opportunities based on their recent performance, strategic initiatives, and financial health. As always, it’s essential to conduct thorough research and consider your investment objectives before making any decisions.
