Investing in top-quality TSX stocks doesn’t require a large sum of money. Even with $200, investors can start building a solid, long-term portfolio. Investing in companies with solid fundamentals and promising growth potential can help generate significant gains over time.
Against this backdrop, here are the two TSX stocks that are trading under $20 and have significant growth potential.
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SECURE Waste Infrastructure
SECURE Waste Infrastructure (TSX:SES) is a solid long-term stock to buy under $20. It operates a waste management and energy infrastructure business and has an extensive infrastructure network. Its vast infrastructure network enables it to efficiently handle increasing volumes without the need for heavy new capital spending. This operational leverage supports its growth and margins.
The ongoing strength in its core infrastructure business, combined with its ability to generate high-quality earnings, will support its growth. Moreover, by focusing on organic growth and expanding its footprint through strategic mergers and acquisitions, SECURE is capturing a higher share in the waste and energy infrastructure market. SECURE will benefit from the predictability and resilience of its revenue.
Notably, long-term contracts and strong customer partnerships anchor the business, ensuring steady cash flows and reducing exposure to market volatility. Its waste processing facilities generate recurring revenues that contribute to a stable financial foundation. Moreover, growth in industrial waste processing has boosted profit margins.
With a low debt load, SECURE has the financial flexibility to pursue new growth opportunities, many of which are backed by long-term commercial agreements that guarantee reliable cash flows. Additionally, the recent acquisition of a metals recycling business is expected to further accelerate growth.
Overall, SECURE is well-positioned to deliver strong margins and steady earnings, which will support its share price and dividend payments.
5N Plus
5N Plus (TSX:VNP) is another top TSX stock to buy under $20. This small-cap company is a leading producer of specialty semiconductors and performance materials. These components power some of today’s most rapidly expanding industries, thus supporting the company’s growth.
Thanks to the strong demand, 5N Plus’s revenue is growing at a healthy pace. Moreover, its focus on expanding margins is bearing fruit. Its solid financials have led to significant appreciation in its share price. 5N Plus stock has grown at a compound annual growth rate (CAGR) of 80.8% in the last three years, resulting in a capital gain of 493%.
Recent financial results show strong momentum. 5N Plus reported impressive year-over-year revenue growth, driven primarily by booming demand in the renewable energy and space solar markets, alongside a surge in sales of its bismuth-based products. Thanks to enhanced manufacturing capabilities and a solid supply chain, the company is well-positioned to keep growing.
Looking ahead, 5N Plus’ global footprint and its leading position in several high-value niche markets will support its growth. Moreover, its solid customer relationships and the ability to deliver ultra-high-purity specialty semiconductor materials outside of China augur well for growth.
Despite macro uncertainty, 5N Plus’ specialized product offerings and leadership in high-growth markets position it well to navigate the challenges and deliver outsized returns for its shareholders.
The bottom line
Both SECURE Waste Infrastructure and 5N Plus offer compelling investment opportunities under $20. SECURE’s stable cash flows, operational efficiency, and strategic expansion in the waste and energy infrastructure space make it a solid defensive play. Meanwhile, 5N Plus’s rapid revenue growth, niche market leadership, and exposure to high-demand industries position it as a solid growth stock. Together, these two TSX stocks offer a balanced combination of stability and upside potential, making them ideal candidates to buy and hold.
