2 top TSX midcap stocks to buy for passive income QBR.B and TA

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2 top TSX midcap stocks to buy for passive income QBR.B and TA

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 2 top TSX midcap stocks to buy for passive income QBR.B and TA
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Highlights

  • Quebecor’s return on equity (ROE) was nearly 46 per cent
  • TA stock spiked by about 20 per cent in a year
  • Both these midcap stocks reported high debt-to-equity ratio

Investors with moderate risk levels often look for TSX midcap stocks like Quebecor (TSX: QBR.B) and TransAlta (TSX: TA). Such midcap companies typically hold a market capitalization ranging between C$ 2 billion to C$ 10 billion and can provide some growth exposure.

Income-focused investors seeking midcap stocks can also look at these TSX stocks that dole out dividends. So, let's dive in.

1. Quebecor Inc (TSX: QBR.B)

Quebecor is a telecommunication operator with a market capitalization of C$ 6.6 billion. The communication service firm recorded a dividend yield of four per cent, which shows the annual dividend paid by the company as a percentage of its share price.

The telecom’s profitability, measured by its return on equity (ROE), was nearly 46 per cent. However, the midcap firm posted a debt-to-equity (D/E) ratio of 5.01. the D/E ratio above one generally indicates high financial risk. Hence, investors should note all such key financial metrics to make informed investment decisions.

QBR.B stock decreased by nearly 16 per cent in 12 months. According to Refinitiv data, Quebecor stocks seem to be a mixed trend with a Relative Strength Index of 47.5 (moderate) as of July 14.

QBR.B and TA: 2 TSX midcap stocks for passive income

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2. TransAlta Corporation (TSX: TA)

TransAlta is a utility company engaged in power production with energy trading and marketing business. In addition, the midcap utility company have transmission lines to supply natural gas.

TransAlta doles out a dividend of C$ 0.05 every quarter. Also, the utility company seems to involve high financial risk as its D/E was at 4.28.

TA stock spiked by about 20 per cent in a year. As per Refinitiv, TransAlta stock had an RSI of 56.62 at the time of writing on July 14.

Bottomline

Investors can explore Quebecor and TransAlta amid the ongoing market environment as these midcap stocks pay dividends that can provide some financial flexibility and stability amid inflationary pressure and interest rate effects. From a long-term perspective, these TSX stocks could also offer significant growth exposure.

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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