Every RRSP (Registered Retirement Savings Plan) deadline forces you to ask the same question: What should I buy?
An RRSP is a retirement account, so investors should own quality stocks with the goal of generating inflation-beating returns over decades. In this article, I have identified three such Canadian stocks that RRSP investors can buy right now.
One sells natural gas. One sells electricity. One mines gold in Africa. Each is at a turning point that I don’t think the market has fully priced in.
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Tourmaline Oil: A top Canadian energy stock
Tourmaline Oil (TSX: TOU) is Canada’s largest natural gas producer, and its second quarter showcased the company’s focus on operational discipline.
As gas prices were weak, Tourmaline increased storage in Alberta, Ontario, and California. It plans to sell that gas later in the year at higher prices.
Despite a weak pricing environment, the company reported operating cash flow of $786 million and free cash flow of $192 million. It ended Q2 with a net debt of $1.5 billion, around $250 million below the management target.
Tourmaline is also holding back on activity. It has 67 wells ready to be fracked and another 21 ready to turn on. Further, Tourmaline is pausing its big British Columbia expansion for one year between phases, which lowers capex spending to $2.55 billion in 2027 and $2.3 billion in 2028.
Jamie Heard, who takes over as chief financial officer in November, explained:
“The ethos here is we want demand to pull gas, increase price. When we have that pull to answer, we’ll respond with supply and feed it into exactly where that demand is.”
CEO Mike Rose said the first use of extra cash would be a higher base dividend, which currently sits at $0.50 per quarter.
Brookfield Renewable: One of the top TSX stocks for the power crunch
Brookfield Renewable (TSX: BEP.UN) is a clean energy giant positioned to benefit from several tailwinds.
In Q2, its funds from operations grew 13% to US$421 million. It brought 1.3 gigawatts of new capacity online and signed contracts to sell power from another 2.6 gigawatts.
The company is also spending wisely. It agreed to buy Aypa, North America’s largest standalone battery storage platform, for US$3 billion, which doubles Brookfield’s battery capacity to about six gigawatts.
Through Westinghouse, Brookfield owns a leading nuclear technology supplier. The U.S. Department of Energy committed up to US$17.5 billion in loans to help order equipment for as many as 10 Westinghouse reactors.
Brookfield also plans to merge its two listed entities into one corporation, with votes expected in October. Management says distributions will not change. For RRSP investors, that’s a growing income stream compounding without annual tax.
Allied Gold: The TSX stock with its biggest catalyst arriving now
Allied Gold (TSX: AAUC) is the riskiest name on the list, and also the one with the clearest near-term catalyst.
The company runs mines in Mali and Côte d’Ivoire. In the second quarter, it produced just over 97,000 ounces of gold at costs below US$2,200 per ounce.
The key driver is Kurmuk, its new mine in Ethiopia. Management expects 240,000 to 270,000 ounces a year, with costs possibly below US$1,000 per ounce. Cheap grid power at four cents per kilowatt-hour is a big reason why.
In September, Allied said a power line linking Kurmuk to Ethiopia’s national grid was commissioned and energized, and the mine’s first ore went through the crushing circuit.
Allied also has a strategic investment from Zijin Gold that should lift its cash to nearly half a billion dollars. CEO Peter Marrone pointed out that the company received a $44 per share takeover offer in January.
Political risk in these regions is real. I’d keep this as a smaller position. But a new low-cost mine can change a company’s earnings power quickly.
The Foolish bottom line on these top RRSP stocks
Gas, power, and gold are three different engines, which offer diversification. Each one is backed by organic demand and management teams that are acting with discipline.
The mix is what makes them work together in an RRSP. Basically, you’re owning businesses built to grow for years.
