Got $500? 5 best TSX stocks to buy in 2021

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Got $500? 5 best TSX stocks to buy in 2021

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 Got $500? 5 best TSX stocks to buy in 2021
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Highlights

  • One of the companies mentioned here partnered with Lightlife, a consumer goods brand, to serve plant-based chicken sandwiches and bites over 400 quick-service restaurants.
  • One of the below companies posted a 37 per cent increase in oil production YoY in its latest quarterly report.
  • These companies have dividend-paying histories with one posting a three-year average dividend growth of 104.4 per cent

The S&P/TSX Composite index posted a Year-to-Date (YTD) return of 18.55 per cent, and the S&P/TSX 60 Index posted a YTD return of 19.5 per cent. However, one of the stocks mentioned in this story outperformed both these indexes by posting a higher YTD return of 132.51 percent. Moreover, the highest one-year return posted by the same stock was 154.95 per cent.

On the backdrop of dividend histories, positive dividend growth rate, and higher return ratios, let us look at some of these stocks where investors can potentially park their funds or invest C$ 500.

  1. Algoma Central Corporation (TSX: ALC)

Algoma Central ships raw materials like iron ore, grains, etc. The shipping company operates a fleet of Canadian liquid and dry bulk carriers. On September 14, the company held outstanding shares of 37.8 million and a market cap of C$ 650.55 million.

On September 13, the stock of the shipping company traded close to 110 per cent above its 52-week low of C$ 8.2 (September 21, 2020). It closed at C$17.21 apiece on September 13. The stock price surged up by roughly 108 per cent over the past year.

A quarterly dividend of C$ 0.17 was issued by Algoma Central on September 1, the dividend yield was 3.95 per cent on September 14, and its three-year average dividend growth rate stood at 104.4 per cent.

The company posted a return on equity (ROE) of 10.48 per cent, earnings per share (EPS) of 1.63 on September 14.

Owing to the increase in volumes driven by a higher recovery in fuel cost and higher cargos, Algoma Central in the second quarter of the fiscal year 2021 posted domestic dry-bulk revenue of C$ $96,855, up 23 per cent Year-over-Year (YoY).

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  1. Tourmaline Oil Corp. (TSX: TOU)

The oil and gas company extracts crude oil and natural gas located in the Western Sedimentary Basin of Canada. The company has natural gas and crude oil reserves. Tourmaline Oil is scheduled to pay a quarterly dividend of C$ 0.17 per share on September 29. The dividend yield of the company was 1.7 per cent on September 14.

As per the valuation metrics, the oil and gas scrip posted a price-to-earning (P/E) ratio of 8.4, ROE of 15.7 per cent, and return on assets (ROA) of 11.13 per cent on September 14.

In Q2 FY21, the average production of oil of the company was 410,339 barrels of oil equivalent per day (boepd), up 37 per cent YoY. Its cash flow was C$ 1.89 per share or C$ 343.9 million in the same period.

In the last nine months, the stock price of the oil and gas company increased by 124 per cent and expanded by nearly 155 per cent over the past year. At the market close on September 13, the stock price was C$ 39.9.

 

Also Read: 5 Canadian real estate stocks to buy under $100

  1. Pizza Pizza Royalty Corp. (TSX: PZA)

The company operates under a quick-service franchise-based restaurant model. The royalty income of Pizza Pizza Royalty in Q2 FY21 was C$ 7.65 million, up from C$ 7.45 million in Q2 FY20. During the quarter, five new restaurant locations were added to the portfolio.

As per the latest report, Pizza Pizza Royalty partnered with Lightlife, a consumer goods brand, to add plant-based chicken sandwiches and bites to its menu, which is available to consume at over 400 locations of Pizza Pizza.

The investors of Pizza Pizza Royalty are expecting a monthly dividend of C$ 0.06 to be rolled out on September 15. The dividend yield was 6.4 per cent on September 14.

The one-year stock return was 27 per cent, and the company's stock price was C$ 11.24 at the close of the market on September 13.

The company held a market cap of C$ 276.7 million and posted a price-to-book (P/B) ratio of 1.25 on September 14. Moreover, on this day, the ROE was 8.16 per cent, and ROA was 6.51 per cent.

Also Read: 5 Canadian stocks to buy under $5

  1. Maple Leaf Foods Inc. (TSX: MFI)

The C$ 3.34 billion market cap company (September 14) sells prepared meals and meats and pork, fish, and poultry products. Maple Leaf Foods operates in countries like China, Canada, Japan, and the US.

The consumer packaged goods company will likely issue C$ 0.18 per share as quarterly dividends on September 29. The five-year dividend growth rate stood at 13.86 per cent, and the dividend yield was 2.67 per cent on September 14.

The company, on September 14, posted a debt-to-equity (D/E) ratio of 0.65, EPS of 1.2, ROE of 7.56 per cent, and ROA of 3.75 per cent.

Maple Leaf Foods posted total sales of C$ 1.16 billion in Q2 FY21. Its adjusted EBITDA margin was 11.9 per cent in Q2 FY21.

The stock price of the company dipped close to four per cent over the past year. However, on a quarter-to-date (QTD) basis, it increased nearly five per cent. It reached its 52-week high price of C$ 29.46 on March 24.

  1. Andlauer Healthcare Group Inc. (TSX: AND)

The company caters to the healthcare sector by providing specialized temperature-controlled freight and logistics. It operates as a medical distribution company.

Andlauer Healthcare Group debuted on the Toronto Stock Exchange after the successful launch of its initial public offering (IPO) on December 11, 2019. The company has a dividend-paying history, with the latest quarterly dividend of C$ 0.05 paid on July 15.

Andlauer Healthcare posted a P/B ratio of 13.27, ROE of 43.72 per cent, and ROA of 15.12 per cent and held a market cap of C$ 653 million (at the time of writing)

The stock closed at C$ 48.84 on September 13, and on a QTD basis returned 33 per cent, but it only returned close to 10 per cent over the past year.

Bottom line

As the volatility of the stock market changes rapidly, so does the movement in stock price. A large swing in stock prices must be considered along with other risk factors when investing C$ 500 in a wide variety of stocks.

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