In a well-diversified portfolio, it’s essential to have exposure to higher risk stocks with big upside. While their place in a portfolio should be limited to less than 10%, the exact weighting is dependent on your age and risk tolerance, exposure to these stocks gives investors exposure to big, life-changing returns.
In this article, I would like to discuss two TSX stocks that have higher risk, higher reward profiles. Here’s why I think you should consider adding them to your portfolio.
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BlackBerry: a TSX stock with imminent growth drivers and catalysts
The first TSX stock is BlackBerry Ltd. (TSX: BB). While BlackBerry’s stock has been stuck trading below $10 for many years now, things have been brewing underneath the surface. And recent results are starting to catch up to the promise that I’ve always seen in the company.
For example, BlackBerry’s recently reported quarter (Q1, fiscal 2026) beat expectations on both the revenue and earnings lines. Revenue came in at $121.7 million, and earnings per share (EPS) came in at $0.02. This compares to EPS of a loss of 0.03 in the same quarter last year. It also compares to expectations for EPS of $0.00.
So, what’s driving this? Well, an important part of the story is BlackBerry’s drive to lower costs and increase efficiencies. In fact, management reduced costs by $150 million last year in its quest to streamline and right-size the business.
Today, BlackBerry has a very solid balance sheet, is cash-generating, and is profitable. In terms of its balance sheet, BlackBerry’s debt-to-total capitalization ratio is a mere 21%. In terms of cash generated, cash from operations was $11 million. These are milestones that investors like me, who believed in BlackBerry’s potential, have waited a long time for.
Looking ahead, BlackBerry’s QNX business is facing strong growth tailwinds. The future of the connected car is here, and BlackBerry is front and centre in this revolution. Backlog for its QNX business is $865 million, a clear signal of the growth that we can expect. In 2025, the company’s total revenue was $535,000.
Peyto Exploration: A TSX stock benefiting from steadily rising demand
The other stock that I believe has significant upside potential is Peyto Exploration and Development (TSX: PEY). Peyto is one of Canada’s largest natural gas producers, with long-life, low-cost reserves and a diversified set of markets and customers.
Peyto is a natural gas producer, and as such, it is very exposed to natural gas prices. As you know, commodity prices can be very volatile. Yet, Peyto has done an impressive job at keeping cash costs low, cash flows up, and margins high.
In the scenario where natural gas and commodity prices rally big, Peyto stock has a very significant upside. And this scenario is likely, in my view, as an analysis of the long-term outlook for the natural gas market is quite positive. In a nutshell, natural gas is in demand as a replacement for coal in the electrification movement and in liquefied natural gas (LNG) markets.
Peyto is currently trading at a price-to-cash flow multiple of 5.1 times, and its dividend yield is a very generous 7.22%. In my view, the stock is highly undervalued given the strong outlook as well as the company’s excellent operational and financial management record.
The bottom line
The two TSX stocks that I touched upon in this article are both extremely well run, and they are facing strong fundamentals, both in their respective industries and in their company-specific outlooks.
