As we close off 2024, let’s take a moment to consider how to best position ourselves for the new year. Because 2025 is fast approaching, we wouldn’t want to be caught off guard. What are some of the essential TSX stocks to own? How can we best capitalize on the opportunities of the year?
These are some of the questions to think about. Let’s take a look at a few essential TSX stocks for 2025.
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TSX stock #1: CGI
As the new year approaches, I’m well aware of the phenomenal 2024 that the TSX has had. I’m also worried about what’s to come. A stock like CGI (TSX: GIB.A) eases my worries. This stock has exposure to the artificial intelligence (AI) industry, as well as a strong and long history of excellence and shareholder value creation.
CGI is a $36 billion global leader with consistently growing revenue, margins, and profitability. After years of strong cash flows, CGI is finally ready to initiate a dividend. It’s small, but it’s a welcomed move and a clear indication of CGI’s strength. It’s important to note that this dividend does not compromise CGI’s growth strategy, which will continue.
The IT services market remains highly fragmented, and CGI remains well-positioned to continue to consolidate it globally. Given its history of success, we can rest assured that the company will continue to carry out its mission with high returns to shareholders.
Stock #2: Northwest Healthcare REIT
2025 will also be a year of continued demand for healthcare. As the population continues to expand and age, we will see continued demand for everything healthcare. This includes Northwest Healthcare Properties REIT (TSX:NWH.UN) buildings.
The REIT has admittedly experienced some major problems in its recent history. But today, the company stands with an improving balance sheet, a more focused list of properties, and a mission to enhance operational efficiency. Also, it’s yielding a very generous 8%.
Finally, this holding should be considered a defensive one, and that might be just what we need in 2025. You see, Northwest’s assets are characterized by long leases, and they’re inflation-indexed. This makes the cash flow profile of these assets quite stable and predictable.
TSX stock #3: Well Health Technologies
Lastly, we have Well Health Technologies (TSX: WELL). Interestingly, Well Health has elements of both the artificial intelligence (AI) theme and the healthcare theme. And it’s been growing at lightspeed rates as it rises to digitize the healthcare industry, driving productivity, efficiency, and better care.
Well Health’s biggest opportunity is in the Canadian primary care market, which is a very large market that’s in need of Well Health’s technology. The opportunity in 2025 is big as Well Health will continue to acquire and digitize in this large, untapped market.
In fact, of the $40 billion of physician spending, Well Health has roughly $400 million. Long term, Well Health is targeting revenue of $4 billion from the Canadian primary care market. This is approximately 10 times current levels and would only represent 5% of the market.
Well Health stock has rallied significantly this year, and in my view, this is just the start. I expect 2025 to be another solid year both in terms of the company’s financial results and its stock price.
