Investing even $500 in the right stocks can give you access to outsized returns. So, if that’s all you’ve got at the moment, rest assured. I’ve got two Canadian stocks that have the right risk/reward profile to take your investment portfolio to the next level.
Without further ado, let’s take a look at the two stocks to consider investing in right now.
Ballard Power Systems: A Canadian stock with a long history
Well, the tide has really turned for Ballard Power Systems (TSX:BLDP) in the last few years. After hitting highs of more than $50 in early 2021, the environment for Ballard, along with its stock price, has turned decidedly negative.
Changing regulations, delayed adoption, and financial pressures are taking their toll. This has led to fuel cell companies like Ballard turning their focus on manufacturing costs, execution, and a drive to reduce the total cost of ownership for their customers. The goal here is to make fuel cells competitive from a cost perspective and a performance perspective.
Today, Ballard Power is rising to the occasion. The company has no debt, no immediate capital needs, and is aiming to be cash flow positive by the end of 2027. In order to get there, Ballard is evaluating markets that are not performing as well as had been expected, such as the heavy truck market. Investment in this vertical is being adjusted lower. Simply put, a realignment and headcount reduction have freed up cash that will be put to better use in verticals that are growing nicely and performing well.
In Ballard’s latest quarter, revenue increased 11% to $17.8 million, and its gross margin increased 24 basis points to -8%. This was driven by lower manufacturing costs resulting from the restructuring of the business. Recent July restructuring costs will reduce operating costs by another 30%.
Finally, Ballard’s backlog currently stands at $84.3 million. With a focus on the right markets that are working in the near term and an improvement in the company’s cost structure, there seems to be hope. Fuel cells are closer than ever to being a positive value proposition for customers and a money-making business for Ballard.
Well Health Technologies: This stock is rallying on record-breaking results
As a digital healthcare company that’s aiming to digitize and improve healthcare systems through technology, Well Health Technologies Corp. (TSX:WELL) sure has momentum on its side. The healthcare industry is benefitting tremendously from Well Health’s technology, and it shows in Well Health’s results.
In fact, in the last five years, the company’s revenue has increased by more than 1,700% to $920 million in 2024. This has been accompanied by sharp rises in profitability and cash flows. In Well Health’s most recent quarter, revenue increased 57%, earnings per share (EPS) came in at $0.10, and free cash flow increased 34% to $11.7 million.
Looking ahead, Well Health is expected to continue to grow its Canadian clinics business. Current estimates for EPS are $0.22 in 2025, $0.30 in 2026, and $0.36 in 2027. The stock is currently trading at a mere $4.93. This means that it’s trading at only 13 times 2027 earnings estimates.
The bottom line
If I were investing $500 in these two Canadian stocks, I would overweight Well Health. This is due to the fact that the risk profile for Well Health is considerably lower. This could look like buying 65 shares of Well Health for a $320 investment and 50 shares of Ballard Power for a $180 investment — for a total investment of $500.
