MRU to MFC: 5 TSX large-cap stocks to explore amid market volatility

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 MRU to MFC: 5 TSX large-cap stocks to explore amid market volatility
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Highlights

  • The TSX main equity index spiked by nearly six per cent quarter-to-date
  • Northland posted a net profit of C$ 267.86 million in Q2 2022, up from a loss of C$ 6.37 million in Q2 2021
  • Metro’s net profit also grew by nine per cent to C$ 275 million in Q3 FY2022 compared to C$ 252.4 million in Q3 2021

Canadian investors with low-risk capabilities can explore large-cap stocks like Metro (TSX: MRU), Algonquin (TSX: AQN), Manulife (TSX: MFC) etc., to capture long-term gains.

Though the TSX main equity index spiked by nearly six per cent quarter-to-date (QTD), investors sensitive to stock market fluctuations may prefer large-cap stocks that could help tackle economic shocks and downturns.

For risk-averse investors, Kalkine Media® have shortlisted five TSX large-cap stocks that can be explored for the long term. These Canadian companies recently announced financial results for their latest quarter. So, without any delay, let us talk about them.

1.     Metro Inc (TSX: MRU)

Metro is among the biggest grocery and pharmacy retailers in Canada. Metro sells products under banners like Food Basics, Super C, Metro, Jean Coutu (acquired in 2018) etc. In addition, it licenses its trademarks and supplies merchandise as a franchiser. This consumer company holds a market capitalization of approximately C$ 16.8 billion.

Metro said its sales reached C$ 5.86 billion in the third quarter of fiscal 2022, denoting a year-over-year (YoY) rise of 2.5 per cent. The retail company also stated that its operating income before depreciation and amortization amounted to C$ 565.1 million in the latest quarter, 5.9 per cent up from the same quarter last year. Net profit also grew by nine per cent to C$ 275 million in the third quarter this year compared to C$ 252.4 million a year ago. Metro also declared a quarterly dividend of C$ 0.275 set to be distributed on September 21.

Stocks of Metro spiked by almost 11 per cent in 12 months. As per Refinitiv findings, MRU stock’s Relative Strength Index (RSI) value was 51.77 while writing on August 12. The RSI value falling between 30 to 70 typically denotes a moderate momentum.

2.     Algonquin Power & Utilities Corp (TSX: AQN)

Algonquin reported a double-digit surge of 18 per cent in its top line to US$ 624.3 million in Q2 2022, relatively up from US$ 527.5 million in the same quarter of the prior year. Despite revenue growth, the utility giant posted a net loss of US$ 33.4 million in the latest quarter, comparatively low from a profit of US$ 103.2 million recorded a year ago. However, the C$ 12-billion market cap company announced a quarterly dividend of US$ 0.181, scheduled to be paid on October 14, consistent with the previous pay-out.

Stocks of Algonquin Power climbed over six per cent in one month. According to Refinitiv, AQN stock held an RSI value of 70.45, indicating that the stock could start experiencing an overbought condition on August 12.

5 TSX large-cap stocks to focus on: MRU, AQN, NPI, WSP and MFC©Kalkine Media®; ©Garis Studio via Canva.com

3.     Northland Power Inc (TSX: NPI)

Northland Power said its financial and operational performance in Q2 2022 was stronger than expected. Following this, the utility company announced upgrading its full-year guidance for fiscal 2022 primarily based on European high market prices and 'solid' operational results.

Northland saw its sales surge to C$ 556.79 million in the second quarter this year relative to C$ 408.32 million in the same period of 2021. The large-cap utility company posted an improved gross profit of C$ 484.95 million and an operating profit of C$ 231.58 million in the latest quarter, higher than C$ 367.68 million and C$ 117.84 million in Q2 2021. As a result, Northland posted a net profit of C$ 267.86 million in Q2 2022, up from a loss of C$ 6.37 million in Q2 2021.

Stocks of Northland Power swelled by over 28 per cent in six months. Refinitiv data suggests that NPI stock is on a bullish trend as its RSI value was 86.26, which denotes a high momentum, on August 12.

4. WSP Global Inc (TSX: WSP)

WSP Global reported C$ 2.76 billion in revenues in Q2 2022, a five per cent growth from the prior year's second quarter. WSP said its backlog was C$ 11.4 billion on July 2 this year, reflecting 12.5 months of revenues. However, the construction company posted a reduced net income of C$ 89.3 million in the latest quarter, comparatively low from C$ 120 million recorded in Q2 2021. Despite decreased profits in Q2 2022, WSP Global announced a quarterly dividend of C$ 0.375 timed for payment on October 15.

WSP Global revealed on August 8 that it signed an agreement to acquire RPS Group, a global consultancy and professional service provider, via its 100 per cent owned subsidiary, thereby executing its 2022-2024 global strategic action plan.

Stocks of WSP Global gained almost 17 per cent in three months. According to Refinitiv data, WSP stocks seems to be on a medium-to-high trend, with an RSI value of 63.51 on August 12.

5.     Manulife Financial Corporation (TSX: MFC)

Manulife reported that Canada's new business value increased to C$ 82 million in Q2 2022 compared to C$ 76 million in Q2 2021. The US new business value also jumped to C$ 92 million in the latest quarter relative to C$ 75 million a year ago. However, this increase was offset by a decrease in Asia's new business value to C$ 337 million in Q2 2022 compared to C$ 399 million in the previous year's second quarter. As a result, the total new business value reduced to C$ 511 million in the latest quarter than C$ 550 million a year ago.

The Manulife stocks zoomed by over eight per cent quarter-to-date (QTD). Based on the latest data from Refinitiv, WSP stocks appear to be on an uptrend with an RSI value of 67.76 (nearing the overbought level of 70) on August 12.

Bottom line

Equity investors with limited risk capacity can explore the TSX large-cap stocks. As all these Canadian companies pay a steady dividend, these stocks could become a reliable source of passive income.

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.

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