5 Canadian momentum stocks to buy in October

Highlights

• Investment in momentum stocks can be risky, one should have a technical evaluation of the stocks and the near-future market trends to avoid loss and earn higher gains.
• One of the below-mentioned companies posted a return on equity of 16.81 per cent.
• One held a price-to-earnings ratio of 32.3.

Not all investors prefer to invest in equities in the long-term to capitalize on higher returns at low risk. Some investors who understand the stock market dynamics and know technical tactics are interested in making short-term gains from the market trends. They invest in high momentum stocks hoping to gain from the continuation of current market trends.

Let us discuss five TSX-listed momentum stocks.

Also read: Theseus Pharmaceuticals IPO: How to buy THRX stock?

Image description: 5-TSX listed momentum stocks with their prices on October 4, 2021

Bank of Nova Scotia (TSX:BNS)

Bank of Nova Scotia is a global bank that provides a full range of financial products and services across North America, Europe and other countries.

The bank’s scrip wrapped up trading at C$ 77.47 apiece on Monday, October 4, marking almost a six per cent fall from its 52-week high of C$ 82.35 reached on June 17. Its scrip soared more than 38 per cent in the past year and experienced a year-to-date growth of roughly 13 per cent on October 4.

The 94 billion market cap bank held a price-to-earning (P/E) ratio of 10.90, price-to-book (P/B) ratio of 1.46 and return on equity (ROE) of 14.11 per cent on October 4.

BNS was ranked among the top ten actively traded stocks on the Toronto Stock Exchange (TSX) with a 10-day average trade volume of 7.4 million on this day.

At the time of writing, the bank posted a dividend yield of 4.647 per cent with a five-year average dividend growth rate of 4.96 per cent.

The banking firm is expected to pay a quarterly dividend of C$ 0.90 per share to its shareholders, payable on October 27.

Cameco Corporation (TSX:CCO)

The Saskatoon-headquartered Cameco Corporation is an integrated uranium producer and supplier with Tier I operations in Canada and Kazakhstan. The company markets and supplies uranium products and services across North America, Australia and Asia.

On Monday, October 4, the CCO stock closed at C$ 27.51 apiece, about 18 per cent below its 52-week high of C$ 33.61 (September 13). Its stock surged by approximately 112 per cent in the past year and noted an increase of more than 61 per cent on a year-to-date (YTD) basis.

The company held its market capitalization at C$ 10.9 billion, with a P/B ratio of 2.215, price-to- cash flow (P/CF) ratio of 28.60, and debt-to-equity (D/E) ratio of 0.20 on this day.

The company pays dividends to its shareholders annually and posted a dividend yield of 0.291 per cent, at the time of writing.

Cameco is an actively traded stock on the TSX with a 10-day average trade volume of 1.9 million.

BCE Inc. (TSX:BCE)

BCE Inc., a Quebec-based telecom operator, saw its stock closing at C$ 63.09 apiece on October 4, representing a fall of nearly six per cent from its 52-week high of C$ 67.08 (September 13).

The communication and mass media firm’s stock jumped by almost 16 per cent on a YTD basis and climbed by about 15 per cent in the last nine months.

The C$ 57 billion market cap firm noted P/E ratio of 19.60, ROE of 16.81 per cent and a dividend yield of 5.548 per cent on this day. The firm is supposed to pay a quarterly dividend of C$ 0.875 per share to its shareholders on October 15.

Also read: 5 best Canadian water stocks to buy

George Weston Limited (TSX:WN)

George Weston Limited is a Toronto headquartered public holding firm that owns a portfolio of retail (Loblaw), food distribution (Weston Foods) and real estate (Choice Properties) businesses that operates in North America.

The firm’s scrip climbed by almost 37 per cent in the past year and experienced a YTD increase of nearly 42 per cent. On October 4, its scrip wrapped trading at C$ 134.61 apiece, a jump of more than 46 per cent from its 52-week low of C$ 91.95 (February 24).

The holding firm posted a P/E ratio of 32.3, a P/B ratio of 3.18, a return on equity of 9.73 per cent and a dividend yield of 1.783 per cent on this day.

Telus Corporation (TSX:T)

The Vancouver-based telecom giant, Telus Corporation, offers mobility, healthcare, and agriculture solutions in addition to wireless and landline services in the country and internationally as well.

On October 4, its stock was priced almost eight per cent below its 52-week high of C$ 29.99 (September 8) at C$ 27.63 apiece at market close. Its stock surged by nearly 17 per cent in the past year and grew about 10 per cent on a YTD basis.

The company noted a P/E ratio of 29.60, P/B ratio of 2.549, return on equity of 9.35 per cent and dividend yield of 4.578 per cent on this day.

Telus is ranked among the actively traded TSX-listed stocks with a 10-day average trade volume of nearly 2 million at the time of writing.

Also read: Which TSX energy stocks to buy as oil hits highest price since 2014?

Bottom line

Investors may be able to generate higher returns if they are well versed with stocks, market trends and situations. Generally, such investors keep booking profit for shorter periods and move on to the next stock.

At the same time, this is relatively riskier than a long-time investment as a sudden change in market trends directly affects such stocks. Thus, risk-averse investors who are rookies should avoid investment in momentum stocks.