- The TSX Capped Real Estate Index contracted by almost 18 per cent in 2022
- Royal Bank (TSX: RY) expects the RPS’ national aggregate home price index to plummet by over 12 per cent by early 2023
- IFC stock galloped by nearly 16 per cent so far this year
The TSX Capped Real Estate Index contracted by almost 18 per cent in 2022 amid growing inflation (which reportedly reached 8.1 per cent in June), while the interest rate pressure continues to threaten housing demand and affordability.
Canada’s biggest lender, Royal Bank (TSX: RY), is said to have downgraded its forecast for the country’s housing market, expecting RPS’ national aggregate home price index to plummet by over 12 per cent by early 2023. This can be the steepest correction in the nation’s history, which could spook investors. However, switching to a long-term approach could be a healthy way out of such a market situation.
Following are some quality TSX stocks that investors can consider for quality returns in the long run.
1. Royal Bank of Canada (TSX: RY)
Royal Bank inked an agreement with data aggregator Envestnet | Yodlee in June to enable clients better manage their financials and wealth via a direct application program interface (API) connection.
The C$ 175-billion market cap lender will disburse a quarterly dividend of C$ 1.28 on August 24. The RY stock plunged by nearly seven per cent year-to-date (YTD). As per Refinitiv, RY stocks held a Relative Strength Index (RSI) value of 51.18 on July 29, which typically points to a moderate trend.
2. Manulife Financial Corporation (TSX: MFC)
Financial service provider Manulife posted a return on equity (ROE) of over 19 per cent, which generally represents profitability measured by dividend and its net profit by total shareholders’ equity. The C$ 44-billion market financial company improved its net earnings attributable to shareholders to C$ 3 2.97 billion in Q1 2022 relative to C$ 783 million in the first quarter of 2021.
MFC stock sank by almost three per cent in 12 months. According to data collected from Refinitiv, MFC stocks held an RSI value of 62.84 on July 29, denoting a moderate-to-high trend.
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3. Intact Financial Corporation (TSX: IFC)
Intact Financial said its operating direct premium grew by 36 per cent year-over-year (YoY) to C$ 5.8 billion in Q2 2022. The Canadian insurance company saw its distributable income spike by 19 per cent to C$ 141 million in the latest quarter compared to Q2 2021. Intact posted a triple-digit increase of 107 per cent in its net earnings to C$ 1.18 billion in Q2 2022.
The IFC stock galloped by nearly 16 per cent so far in 2022. Refinitiv findings suggest IFC stocks appeared to be on an upward trajectory with an RSI value of 64.46 on July 29, showing marginally down from the overbought territory of 70.
4. Fortis Inc (TSX: FTS)
Utility service provider Fortis improved its net profit by 31 per cent to C$ 284 million in the second quarter this fiscal year compared to the same period of 2021. The utility giant also revealed that it is aiming for an average annual dividend growth rate of six per cent through 2025. The FTS stock jumped by almost 10 per cent in nine months. Refinitiv data says that FTS stocks held an RSI value of 49.86 on July 29
5. Telus Corporation (TSX: T)
Telus announced on July 28 that Seattle-headquartered Ookla® recognized the telecom operator as the Fastest Mobile Network in the country, achieving a Speed Score™ of 91.30.
Stocks of Telus Corporation were up by over six per cent in 52 weeks. According to Refinitiv data, Telus stocks saw an RSI factor of 57.72 (moderate level) on Friday.
6. Alimentation Couche-Tard (TSX: ATD)
Circle K's owner acquired four company-operated stores in Q4 2022, thereby expanding its retail footprints. Couche-Tard posted a total revenue surge of 34.3 per cent to US$ 16.43 billion in Q4 2022 compared to Q4 2021. The ATD stock gained by over 18 per cent in nine months. As per Refinitiv data, ATD stocks recorded a rising RSI value of around 65 on July 29.
7. WSP Global Inc (TSX: WSP)
WSP Global is a large-cap company with construction operations across the globe.
WSP has inked a definitive agreement to acquire John Wood Group’s Environment & Infrastructure business in early June to expand its capabilities.
WSP stock dipped by almost 16 per cent in 2022. WSP stocks seem to be on a moderate movement, with an RSI value reaching 66.52 on July 29.
8. Torment Industries Ltd (TSX: TIH)
Torment Industries said its top line slumped by four per cent YoY to C$ 1.08 billion in Q2 2022. However, the Canadian industrial company posted a growing operating profit of C$ 156.5 million in the latest quarter, higher than C$ 122.5 million in Q2 2021.
Torment’s net profit also swelled by 31 per cent YoY to C$ 111.7 million in the second quarter of 2022. The TIH stock slipped by nearly six per cent this year. According to Refinitiv details, TIH stocks had an RSI value of 58.76 on July 29.
9. FirstService Corporation (TSX: FSV)
Mid-cap real estate company FirstService reported revenue of US$ 930.7 million in the second quarter of 2022, higher than the US$ 831.6 million posted in Q2 2021. FSV held an ROE of almost 17 per cent, signalling profitability.
Stocks of First Service dropped by about 27 per cent in one year. As per Refinitiv data, FSV scrips noted an RSI factor of 61.63 on July 29.
10. Loblaw Companies Limited (TSX: L)
One of Canada’s largest retailers, Loblaw, said its net profit rose by C$ 12 million to C$ 387 million in Q2 2022 compared to Q2 2021.
L stock zoomed by over 38 per cent in a year. Loblaw stocks had an RSI value of 47.38 on July 29, according to Refinitiv findings.
The TSX stocks mentioned above are some healthy stocks that could be explored for long-term gains. These TSX stocks can diversify your portfolio to different sectors and can serve as a reliable dividend income source.
Please note, the above content constitutes a very preliminary observation based on the industry, and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.