The TSX Index is running hot, and while there’s sure to be a pullback at some point, I still think that most investors should carefully weigh the risks of sitting in too much cash, especially when you consider how hot inflation is running.
While loading up on bonds and cash equivalents could offset some of the blow of inflation, I’d argue that stocks remain a fantastic asset to own, even when valuations are a bit on the stretched side. Instead of buying the entire market, though, with a TSX Index exchange-traded fund or something similar, it might make sense to uncover some of the bargains (or decent deals) that exist underneath the surface of the Canadian stock market.
Of course, some of the top holdings we’re most familiar with are up big in the past year, and while I view the names as more than worth holding, I think that there are corrected stocks (some of which are just coming back from a brief fall into a bear market, which is a 20% decline from peak levels) that are worth picking up on the dip. Indeed, buying the dip has been a winning strategy amid this multi-year bull run in the Canadian market.
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Cameco: A fierce dividend grower that’s fresh off a bearish plunge
And while there aren’t as many names that are down and out now that the TSX Index is looking to stay hot through the summer months, I do think that one name within the commodity scene stands out. Enter shares of Cameco (TSX: CCO), which are down around 19% from all-time highs after plunging close to 22% from peak to trough. Indeed, it’s been a turbulent 2026 for the uranium producer.
And while the premium uranium miner was long overdue for such a cooldown period, I think the dip has opened the door for a terrific entry point. Indeed, supply disruptions do happen, and they could take a big bite out of a quarter.
But, it’s the long-term story that matters most, especially as the AI data centre buildout powers interest in nuclear energy and, with that, higher uranium demand. Cameco is back up and running, but operating risks can happen, and investors should be prepared for such volatility, especially given the big ups and downs to be had from the name. As big-money investors cash out of Cameco, I think it’s time to take on a contrarian stance.
Of course, the dividend yields just 0.16%, but it’s the dividend growth potential and appreciation capacity that should be the top reason to punch a ticket. Indeed, a 50% dividend hike is massive, but when we’re talking about such a small dividend, it just doesn’t do it for passive-income investors.
Bottom line
Either way, I think dividend growth investors looking for upside momentum in the AI-driven nuclear renaissance should give the name a closer look while shares look to climb higher again after a fairly tough tumble. As we head into the second half, things could go smoother as the firm gets going at full speed again. As one of the best uranium plays in the world, I’d treat any dip as a great opportunity to buy.
