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Summary
- US President-elect Joe Biden is set to assume the Oval Office in January 2021.
- The anticipation around his victory saw several sectors’ rally on the TSX in the first week of November.
- We look at 13 stocks from six sectors that are worth exploring.
Now that Democratic nominee Joe Biden is the US President-elect, investors have a clear picture of how the markets are likely to shape up in near future. Here is a quick rundown of 13 stocks from various sections worth exploring on the back of US elections results:
Healthcare Sector
Affordable healthcare and COVID-19 vaccination were two of the most contested topics during presidential elections debates. These factors are not just limited to the United States but have a bearing on the Canadian markets too.
Viemed Healthcare Inc. (TSX:VMD)
The company provides equipment and home therapy to patients with respiratory disease, oxygen problems, neuromuscular patients, etc. Viemed’s stock has rallied by nearly 45 per cent year-to-date (YTD). The stock has outperformed the capped TSX healthcare index, which is current down 21.76 per cent YTD. Its current price-to-earnings ratio is 12.
Andlauer Healthcare Group Inc. (TSX:AND)
The company offers specialized transportation and healthcare Logistics. Andlauer’s stock has soared over 142 per cent year-to-date, outperforming the TSX healthcare index. This healthcare stock offers a positive return on equity (ROE) of 40.57 per cent, and a positive return on assets (ROA) of 13.21 per cent. Its current debt-to-earnings ratio is 1.66. Andlauer pays a quarterly cash dividend of C$ 0.05 per share.
Andlauer’s Year-To-Date Stock Performance Chart (Source: EODHD/Others Thomson Reuters)
Cannabis Industry
Cannabis’ November rally grabbed news headlines both in domestic as well as global markets. Canadian pot companies are expecting the US president-elect, Joe Biden, will remove cannabis from the list of restricted elements. Some of the trending cannabis stocks are:
Canopy Growth Corporation (TSX:WEED)
Canopy is one of the top healthcare and price performer stocks across the TSX and the TSXV, as per data on the TMX website. In the last six months, the stock has surged 41.75 per cent. Its current market cap stands at C$6.32 billion. Canopy’s 10-day average volume is 2.57 million.
Cronos Group Inc. (TSX:CRON)
Cronos Group cultivates and retails medicinal and recreational cannabis. In the last six months, shares of this pot company have risen over 30 per cent. The pot stock has been ranked on TMX’s top healthcare stocks that have outperformed their peers and the markets (TSXV and TSX) in the last 30 days. Its current market cap is C$3.435 billion and the current price-to-earnings (P/E) ratio is 4.50.
Technology Sector
There is already a anti-trust tussle going on between the US government and big tech companies such as Facebook, Amazon, Apple, and Alphabet (Google parent firm). It would be interesting to watch how Biden will take it forward. However, Canadian tech ecosystem, head lighted by Shopify (TSX:SHOP) is widely different from the US tech club. Here’s a glance of two tech stocks on growth path:
Constellation Software Inc. (TSX:CSU)
The company provides its services to develop and customize the software for public and private sector enterprises. Shares of the software company have swelled by 23.91 per cent year-to-date. Its market cap stands at C$33.325 billion. The company pays a quarterly cash dividend of US$1 per share. The stock offers a positive ROE of 48.67 per cent.
Dye & Durham Limited (TSX:DND)
The tech company offers cloud-based services to government and private organizations. The company debuted on July 17, and its shares have skyrocketed by over 98 per cent since. The company delivers a positive ROE of 9.09 per cent. Its current market capitalization is C$1.065 billion.
Financial Services Sector
As the COVID-19 pandemic threatens to increase bad loans and assets, the push for alternative banking solutions and smooth international transactions may get a boost under the Biden government.
Trisura Group Ltd. (TSX:TSU)
Trisura Group provides insurance services such as risk solutions, surety, corporate insurance, etc.
Shares of the insurer have been rallied by 123 per cent year-to-date. The company’s total debt-to-earnings ratio is 0.14 per cent. Trisura offers a positive ROE of 11.01 per cent. The company made it to TMX’s top price performer and top financial services stocklists. The company reported a net income of C$6.5 million in the third quarter of 2020, an increase of 150 per cent, compared to Q3 2019.
Trisura’s Year-To-Date Stock Performance Chart. (Source: EODHD/Others Thomson Reuters)
Intact Financial Corporation (TSX:IFC)
Intact Financial Corp sells property and casualty insurance with a written premium.
The company’s stock has increased by almost 3 per cent year-to-date. Its current market cap is C$20.720 billion. The stock has a positive ROE of 11.79 per cent. Its debt-to-earnings ratio is 0.36. The company reported a net income of C$ 334 million in Q3 2020, a 79 per cent surge, compared to C$ 187 million in Q3 2019.
Industrials Sector
This sector is in dire need of a stimulus package. Wall Street is expecting a stimulus package announcement from Biden. Let us see if Trudeau also thinks on similar lines.
Ritchie Bros. Auctioneers Inc. (TSX:RBA)
British Ritchie Bros Inc. auctions heavy equipment and operates across the world.
Shares of Ritchie Bros have surged 74.89 per cent year-to-date. The auctioneer pays a quarterly dividend of US$ 0.22 per share. And its current dividend yield is 1.171 per cent. The company offers a positive ROE of 17.94 per cent and its D/E ratio stands at 0.86.
The company registered a net income attributable to shareholders of US$45.4 million and an increase of 80 per cent in Q3 2020, compared to US$25.3 million in Q3 2019.
Finning International Inc. (TSX:FTT)
Vancouver-based Finning International Inc deals in heavy-duty equipment and parts of the Caterpillar brand.
Finning’s stock has gained by almost 28.70 per cent in the last six months. Its current price-to-book ratio is 1.688, and its debt-to-earnings ratio is 0.81. The industrial company pays a quarterly cash dividend of C$0.205 and holds a current dividend yield of 3.606 per cent. It provides a positive ROE of 9.42 per cent.
Basic Materials Sector
Tariffs are probably here to stay under Biden government. But it would be interesting to watch whether Biden will mellow down these hefty rates:
Norbord Inc. (TSX:OSB)
Norbord is the leading manufacturer of oriented strand boards across the world.
Norbord’s stock has increased by nearly 24.87 per cent year-to-date. The company holds a quarterly cash dividend of C$0.60 per share, with a current dividend yield of 5.476 per cent. It offers a positive ROE of 28.95 per cent.
The company posted an adjusted EBITDA of US$322 million for Q3 2020 compared to $84 million in Q2 of 2020 and US$33 million in Q3 of 2019.
Kirkland Lake Gold Ltd (TSX:KL)
Kirkland Lake Gold Ltd operates in gold mining, development, and exploration.
Shares of Kirkland Lake have surged nearly 10.60 per cent year-to-date. The gold company pays a quarterly dividend of US$ 0.125 per share. And its current dividend yield is 1.04 per cent. The company offers a positive ROE of 22.43 per cent, and its current P/E ratio stands at 16.
The company registered adjusted net earnings of US$249.3 million in Q3 2020, a 49 per cent surge compared to Q3 2019.
Labrador Iron Ore Royalty Corp (TSX:LIF)
The company invests through its subsidiary Iron Ore Company of Canada.
Shares of iron ore royalty company have increased by nearly 3 per cent year-to-date. The company pays a quarterly dividend of C$ 0.25 per share. And its current dividend yield is 4.002 per cent. The company gives a positive ROE of 34.55 per cent and its current P/E ratio is 8.
