5 mid-cap stocks to explore in September: EFN, QBR.B, MX, STN & BBD.B

Highlights

• Element Fleet stock galloped by over 27 per cent year-to-date
• Stantec said that its project margin improved from C$ 483.3 million in Q2 2021 to C$ 602.7 million in Q2 2022
• Bombardier stock galloped by roughly 59 per cent in one month

Canadians with a balanced approach to risk and reward can explore mid-cap stocks like Element Fleet (TSX: EFN), Quebecor (TSX: QBR.B), Methanex (TSX: MX), Stantec (TSX: STN), and Bombardier (TSX: BBD.B), which could provide them healthy returns in the future.

Mid-cap investing focuses on stocks of companies having market capitalization between C$ 2 billion to C$ billion. Generally, these stocks are considered stable, owing to their market size. They also provide significant growth exposure as they have the scope to grow into large-cap stocks in the future.

Hence, Kalkine Media® has come up with the following five TSX-listed mid-cap stocks that growth investors can consider:

1.     Element Fleet Management Corp (TSX: EFN)

Element Fleet Management saw its servicing income (net) reach C$ 150.03 million in the second quarter of fiscal 2022, relatively up from C$ 113.18 million posted in Q2 2021. In Q2 2022, its net financing servicing revenue and syndication revenue also increased to C$ 123.25 million (C$ 109.35 million in Q2 2021) and C$ 14.84 million (C$ 12.86 million in Q1 2021), respectively.

As a result, the fleet management company’s net revenue rose to C$ 288.13 million in the latest quarter, higher than C$ 235.4 million a year ago. In addition, Element Fleet will deliver a quarterly dividend of C$ 0.077 on October 14.

Element Fleet stock sprinted by over 27 per cent year-to-date (YTD). As per Refinitiv data, the EFN stock appears to be on an uptrend, with its Relative Strength Index (RSI) reaching 60.04 on August 25. The RSI value ranging between 30 (oversold level) and 70 (overbought level) reflects a moderate trend for a given equity. 

2.     Quebecor Inc (TSX: QBR.B)

Quebecor posted consolidated revenues of C$ 1.11 billion in the second quarter of 2022, comparatively low from C$ 1.13 billion in the previous year’s same quarter. Despite this decline in revenue, Quebecor reported increased profitability as its net income grew to C$ 156.3 million in the latest quarter, relatively high from C$ 124.7 million in the second quarter of last year. Moreover, the telecommunication service provider will also distribute a quarterly dividend of C$ 0.30 on September 13.

Quebecor stock zoomed by roughly six per cent quarter-to-date (QTD). As per Refinitiv findings, the QBR.B scrip recorded an RSI value of 54.78 on August 25, with 0.32 million shares exchanging hands.

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3.     Methanex Corporation (TSX: MX)

Methanex is a Vancouver-headquartered chemical company engaged in producing and selling methanol. Methanex is set for a quarterly dividend of US$ 0.175 on September 30, higher than the previous C$ 0.145 (paid on June 30).

Methanex posted a methanol production of 1.55 million tonnes in Q2 2022, a high from 1.5 million tonnes produced in the same quarter a year ago. The Canadian methanol producer saw its revenue jump to US$ 1.13 billion in the second quarter this year from US$ 1.06 billion in the second quarter of 2021. Methanex reported a net profit of C$ 125 million in Q2 2022, an increase from US$ 107 million in Q2 2021.

Methanex stock spiked by nearly 21 per cent in a year. As per Refinitiv data, the MX stock appears to be on medium-to-high momentum as its RSI value was around 62.9 on August 25.

4.     Stantec Inc (TSX: STN)

Stantec is an industrial company that provides engineering architectural and environmental consulting services to different sectors across the project life cycle (PLC). The construction service provider saw its net revenue increase to C$ 1.11 billion in Q2 2022 compared to C$ 908.3 million in the previous year's second quarter. Stantec said its project margin improved from C$ 483.3 million in Q2 2021 to C$ 602.7 million in the latest quarter.

However, the industrial company saw a reduced net income of C$ 60.7 million in Q2 2022 compared to C$ 63.2 million a year ago. Stantec also announced paying a quarterly dividend of C$ 0.18 on October 17.

Stantec stock grew by nearly seven per cent in 52 weeks. As per Refinitiv information, the STN stock held an RSI value of 60.26 on August 25, which indicates a moderate-to-high trend.

5.     Bombardier Inc (TSX: BBD.B)

Bombardier said that its order backlog increased by 37 per cent year-over-year (YoY) to US$ 14.7 billion in Q2 2022. The company highlighted that this increase backlog reflects continued high demand and ‘strong’ order intake. The aircraft maker also revealed that it delivered 28 aircraft during Q2 2022.

In addition, its aftermarket revenue also jumped by 22 per cent YoY to US$ 359 million in the second quarter of this year. As a result, Bombardier posted revenue growth of two per cent to US$ 1.55 billion in the latest quarter, compared to US$ 1.52 billion recorded in Q2 2021.

However, the mid-cap company noted a net loss of US$ 129 million in the second quarter of the current fiscal, compared to a net profit of C$ 139 million reported in the second quarter a year earlier.

Bombardier stock galloped by roughly 59 per cent in one month. On August 25, the BBD.B stock seemed to be gaining momentum with an RSI value of 66.7, according to data sourced from Refinitiv.

Bottom line

As market environment remains to be unstable, investors with moderate risk levels can consider these TSX mid-cap stocks as they could offer some sense of stability and may also provide significant gains in future. All mid-cap companies discussed here, barring Bombardier, pay a quarterly dividend and could be an explorable option for income-focused investors looking for long-term 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.