Investing in TSX stocks with the potential to generate above-average growth can significantly enhance your portfolio’s return. Such stocks are backed by companies with solid fundamentals and benefiting from secular tailwinds. These attributes enable them to beat the benchmark index by a significant margin. Against this backdrop, here are my top three TSX stocks to buy right now.
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Top TSX stock #1
Shopify (TSX: SHOP) is one of the top TSX stocks with the potential to deliver above-average growth. The technology giant consistently delivers strong financials, driven by a continued increase in gross merchandise volume (GMV) and payment volume. Shopify is poised to capitalize on the growing e-commerce penetration and omnichannel shift through its integrated platform, unified solutions, and increasing adoption of Shopify Payments and Shopify Capital.
Further, this multi-channel commerce platform provider’s innovative products, growing partnerships with leading social media and payment platforms, and expansion of its sales and marketing channels augur well for growth. This strategy will likely attract new merchants, enhance its market position, and boost revenue.
Additionally, Shopify’s transition towards an asset-light business model, artificial intelligence (AI)-driven efficiencies, and focus on lowering costs will ensure sustainable earnings and drive profits over the long term. Moreover, international expansion and opportunities in its offline retail and B2B channels provide a solid foundation for consistent growth.
Top TSX stock #2
Cameco (TSX: CCO) is another top TSX stock worth considering now. The company is likely to benefit from the growing demand for nuclear energy. This leading provider of uranium fuel has significant investments across the nuclear fuel cycle, which positions it well to capture higher demand and deliver solid financials.
Secular tailwinds, such as the growing shift towards clean energy, ongoing electrification of vehicles, and surging energy demand from AI data centres, provide a multi-year growth opportunity for Cameco. Alongside solid demand, Cameco’s comprehensive portfolio, low-cost production, and favourable pricing environment bode well for the future.
Additionally, Cameco’s long-term contracts, planned expansions, acquisitions, and exploration projects will enable it to deliver steady financials. The company is also reducing its debt reduction and strengthening its balance sheet to capitalize on growth opportunities.
Top TSX Stock #3
CES Energy Solutions (TSX: CEU) is a solid long-term bet. This top TSX stock has risen over 150% in one year and over 334% in three years. Further, this uptrend in its stock could sustain in the coming years as the demand for its advanced chemical solutions for the oilfield industry remains solid.
CES Energy has exposure to all significant U.S. basins and is witnessing increasing demand for its specialized solutions due to the growing complexity of the oil and gas extraction process. Further, as oilfield operators use specialized techniques like longer lateral drilling, enhanced hydraulic fracturing, and pad optimization to drive output and efficiency, CES’ innovative production and advanced drilling chemicals are poised to see an acceleration in demand trends, boosting its financial performance.
In addition, CES Energy’s asset-light business model and steady revenues from production chemicals will likely generate significant free cash flow across commodity cycles. Moreover, the company’s strategic procurement strategy, favourable commodity prices, and steady upstream activity in North America will likely support long-term growth.
