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Highlights
- The benchmark overnight rate has increased to one per cent.
- Bank of Canada raised interest rates by half a percentage point on April 13. This was the most significant single move in more than 20 years.
- Amid rising inflation, the price of goods and services rise, and it becomes difficult to manage daily expenses for an average household.
In an expected move, the Bank of Canada raised interest rates by half a percentage point on April 13. This was the most significant single move in more than 20 years as the central bank looks to curb rising inflation.
Some analysts believe that the bank could further hike the interest rates to fight the soaring inflation due to the ongoing war between Russia and Ukraine.
The benchmark overnight rate has increased to one per cent, and this would allow government bonds to roll off as they will mature on Monday, April 25.
Amid rising inflation, the price of goods and services rise, and it becomes difficult to manage daily expenses for an average household.
Therefore, people start looking for alternatives to earn extra money and investing in an equity market could be an option worth considering.
Also Read: 8 reasons why you can save your retirement income in TFSA
As April is ending, investors could be looking to reshuffle their portfolios and if you are among such investors, here are five stocks worth exploring in May.
Sun Life Financial Inc. (TSX:SLF)
Some analysts believe that the stocks of financial companies could be worth considering at a time when the interest rates are hiked amid rising inflation.
Sun Life is one of the leading insurance companies in Canada, and it also provides wealth management services to its customers in Canada, Asia, and the United States.
In the fourth quarter of 2021, Sun Life's profit soared 45 per cent year-over-year (YoY) to C$ 1,078 million. Meanwhile, the underlying net income was up four per cent YoY to C$ 898 million.
For the full year, Sun Life's net income was C$ 3,934 million, representing an increase of 64 per cent YoY. At market close on April 22, the SLF stock was priced at C$ 66.62 per share.
The SLF stock is a regular dividend-paying stock, and its dividend yield is 3.96 per cent.
Manulife Financial Corporation (TSX:MFC)
The life insurance and wealth management company reportedly had C$ 1.4 trillion worth of assets under management at the end of 2021. It is among the top financial services company and has business operations in various countries.
In February, the Manulife Investment Management had announced the acquisition of a mixed-use property in British Columbia.
Manulife reported strong financial results in the previous year, and its net income was C$ 7.1 billion, reflecting an increase of C$ 1.2 billion from 2020.
The company's core earnings were C$ 6.5 billion in 2021 compared to C$ 5.5 billion in 2020. At market close on Friday, April 22, the MFC stock's price was C$ 26.02 apiece.
Barrick Gold Corporation (TSX:ABX)
Gold is considered a hedge against inflation, and if you are not buying the precious metal, you may explore the option of investing in companies involved in mining gold.
Barrick Gold is one of the largest gold producers in the world, and recently it announced that it was on track in the first quarter of this year to achieve 2022 targets.
In 2021, Barrick Gold's revenues were US$ 11.98 billion, and its net earnings amounted to US$ 2.02 billion. Meanwhile, the free cash flow was US$ 1.94 billion.
Also Read: 3 TSX smart penny stocks to buy in May
As the ABX stock is dividend-paying, it could help investors generate passive income frequently, and at the end of the trading session on April 22, the stock price was C$ 30.18 per unit.
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Thomson Reuters Corporation (TSX:TRI)
The Toronto-based multinational media conglomerate is one
of the largest media companies globally, and it was formed through a megamerger between Thomson and Reuters Group in 2008.
Thomson Reuters has different business segments, and in the fourth quarter of 2021, its revenue jumped six per cent YoY to US$ 1.7 billion, and its operating profit was US$ 257 million.
The revenues from Reuters News were US$ 182 million, up 12 per cent YoY, and it was all organic, said the company.
Thomson Reuters holds a market capitalization of C$ 63.3 billion, and it distributed a quarterly dividend of US$ 0.445 per share. The stock of Thomson Reuters closed at C$ 130.23 per share on April 22.
Waste Connections Inc. (TSX:WCN)
Waste management is an important aspect, and this industry is expected to grow in future. Waste Connections is an integrated provider of solid waste management and recycling services.
In Q4 2021, Waste Connections said that its organic growth and acquisition strategy helped the company in delivering solid results. The revenue was US$ 1.6 billion and had a net income of US$ 166.3 million.
Meanwhile, in 2021, the revenue increased 13 per cent YoY to US$ 6.15 billion, and the net income was US$ 618 million. Notably, Waste Connections frequently distributes dividends to its shareholders and helps generate a passive income.
