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As Canada races against the new variant spread of coronavirus and provinces brace themselves for another lockdown, the federal government is all set to present Budget 2021 on April 19. Ever since the pandemic began, the government has spent billions of dollars to deal with it and come out with benefit programs like the Canada Recovery Benefit and Canada Emergency Response Benefit.
It is estimated that the current deficit is at C$ 382 billion and experts believe that the figure might soar up to C$ 400 billion as public health restrictions and job losses may increase amidst rising coronavirus cases.
That said, with just a few days away from the budget, the investors may choose their stocks now. In this article, we bring you five stocks you might want to explore before the budget is announced.
Magna International Inc. (TSX: MG)
In the upcoming budget, the government is expected to focus on its ambitious aim of 'green transformation'. Last year, Finance Minister Chrystia Freeland had hinted about the country's plan of focusing on carbon footprint control and a sustainable finance market.
Since environmental issues seem to be on the agenda, electric vehicles (EVs) could get a further boost in the future. The EV market is already gaining momentum and Magna International which provides mobility technology to all types of automakers could be a stock worth exploring.
The company recently came up with the eBeam technology that will enable automakers to electrify heavy vehicles like trucks without compromising on its utility and functioning. It also came up with the Magna EtelligentEco system that can reduce greenhouse gases (GHGs) emissions by 38 per cent.
Magna International has a market capitalization of C$ 33.8 billion and holds a price-to-book ratio of 2.373. It also holds a 6.82 per cent return on equity. Apart from this, it offers a US$ 0.43 dividend every quarter and has a dividend yield of 1.946 per cent.
The stock climbed about 140 per cent in a year and 25.8 per cent year-to-date (YTD). It was priced at C$ 112.08 apiece at market close on April 7, available at 5.5 per cent down from its 52-week high of C$ 118.71.
In Q4 2020 results, the company posted sales of US$ 10.6 billion, an increase of 12 per cent from the same quarter last year. For the same period, the income from operations before income taxes was US$ 973 million, up from US$ 579 million.
The diluted earnings per share in Q4 2020 were US$ 2.45, up from US$ 1.43 in Q4 2019.
Lithium Americas Corp. (TSX: LAC)
As the electric-vehicle industry is expected to boom, the demand for lithium is going to increase as it is used for making rechargeable batteries. According to a report by data platform Statista, the global lithium-ion industry is estimated to reach US$ 100.4 billion, an increase of 232.4 per cent from 2017.
The stock of Lithium Americas, the Canadian resource company operating in the US and South America could be worth exploring. It has a market cap of C$ 2.2 billion and holds a P/B ratio of 9.31.
The stock skyrocketed in a year and grew 386 per cent and about 8 per cent YTD. The scrips were priced at C$ 18.62 apiece at market close on April 7, available at half the price of its 52-week high of C$ 36.60.
Due to COVID-19 restrictions, the company's operations were affected and as a result, it posted a net loss of US$ 36.2 million in 2020, compared to a net income of US$ 51.7 million in 2019. However, Lithium Americas' cash and cash equivalents increased to US$ 148.1 million, an increase of 77.2 per cent year-over-year (YoY). For the same period, its assets were worth US$ 326.7 million, up against US$ 293.8 million.
TransAlta Renewables Inc. (TSX: RNW)
Renewable energy is not only good for the planet but it can be good for your portfolio too, especially when the Canadian government will focus on clean energy sources to combat climate change. One stock that might interest you is TransAlta Renewables, which is one of the largest producers of wind power in the country right now.
The company's market cap is at C$ 5.5 billion, and it holds a P/B ratio of 2.443. It offers a 4.11 per cent return on equity and a dividend of C$ 0.078 every quarter.
TransAlta Renewables' stock grew 40.4 per cent in a year and stumbled about 10 per cent YTD. At market close on April 7, it was priced at C$ 20.62 apiece, down by 15.6 per cent against its 52-week high of 24.47 and 51.8 per cent up against the 52-week low of C$ 13.59.
In Q4 2020, the company achieved revenue of C$ 128 million, an increase of 7.6 per cent from the same comparable period last year. For the same period, net earnings attributable to common shareholders were C$ 53 million, up by 10.41 per cent.
Andlauer Healthcare Group Inc. (TSX: AND)
As coronavirus cases continue to increase, rollout of vaccines may accelerate with good logistics support. In February, healthcare logistics service provider Andlauer Healthcare acquired Skelton Truck Lines, a pharmaceutical trucking company for C$ 115 million. The deal is said to be associated with the rollout of vaccines across North America.
The healthcare company has a market cap of C$ 483.5 million and holds a P/B ratio of 14.715. It offers a return of equity of 48.40 per cent and recently it started offering a dividend of C$ 0.05 every quarter.
In Q4 2020, the company achieved revenue of C$ 86.6 million, an increase of 13.1 per cent from Q4 2019. For the same period, the net and comprehensive income were C$ 13.8 million, up by 96 per cent.
Bank of Nova Scotia (TSX: BNS)
Bank stocks are often considered by Canadians while diversifying their investment portfolio and they bounced back from pandemic lows. In 2021, these stocks could be worth exploring for positive returns. Bank of Nova Scotia is among the top bank stocks in the country and has a market cap of C$ 94.6 billion.
It was priced at C$ 78.08 apiece on April 7 at market close. In a year, it grew 40.65 per cent and 15.2 per cent YTD. BNS offers a quarterly dividend of C$ 0.90 and has a dividend yield of 4.611 per cent.
The bank achieved a net income of C$ 2,398 million, an increase of 3.09 per cent YoY.
The above constitutes a preliminary view and any interest in stocks should be evaluated further from an investment point of view.