What’s up guys, it’s wiz.
Welcome back to the channel. If you are new, I am a Canadian investor. I cover a whole lot of information about investing in Canada and do research into our Canadian market. I dive into growth investing, dividend investing and Canadian small caps / penny stocks. Today, we will be talking about some of the top Canadian companies for April. Always do your own due diligence before buying into any of these companies. For new investors, you need to join Wealthsimple Trade if you are looking to start investing and live in Canada. If you use my link in the description to join Wealthsimple, you get 2 free stocks worth up to 4500$ so do not miss out.
Let’s start with Fortis (ticker symbol FTS). I think broad market uncertainties are increasing, and it’s better to be safe. So, I think Canada’s top utility stock, Fortis, would be an attractive bet in the current environment. Fortis serves almost 3.4 million customers with electricity and gas. It earns most of its earnings from regulated operations facilitating earnings visibility. This, in turn, enables Fortis to pay stable dividends to its shareholders. FTS stock currently yields around 3.5%, and it has increased its payout in the last 48 consecutive years. Notably, if the broad markets turn weak amid geopolitical tensions and fears of rising inflation, utility stocks like Fortis play well because of their slow-moving stocks and stable dividends. That’s why FTS stock has comfortably outperformed the TSX Index since tensions broke out in Europe.
Next is Toronto-Dominion Bank (ticker symbol TD). This stock has a lot of things going for it at the moment. It is currently in the process of buying First Horizons in a deal that will make it the sixth-largest retail bank in the United States. Its earnings are generally beating expectations, with the most recent quarter coming out ahead on EPS. Should the First Horizon deal close, it will grow even more than it has since 2020. First Horizons will add a large portfolio of commercial loans to TD’s balance sheet — something that has been sorely lacking from the bank’s U.S. business until now. Add to that the fact that interest rates are in the process of rising, and you’ve got a solid case for investing in TD Bank.
Next is Hardwoods Distribution (ticker symbol HDI). There is a massive housing shortage in North America. Housing demand keeps rising, so new home developments also need to meet demand. That is a very favourable trend for HDI. It is one of the largest distributors of building supplies and products in North America. The company has been fast consolidating the space. It just added two large distribution businesses that should vastly expand its addressable market. The company has been growing revenues and adjusted earnings per share by a compounded annual growth rate of 22% and 38%, respectively. Yet it trades for a bargain of six times earnings. For growth and value, this is a solid Canadian stock buy today.
Next is Restaurant Brands (QSR). A great Canadian company that I like talking about. This fast-food franchise giant, owner of popular banners Burger King, Tim Hortons, Popeyes Louisiana Kitchen, and now Firehouse Subs, is a fast-growing player in this increasingly consolidated sector. I think Restaurant Brands has the ability to grow organically and via acquisitions over the long term. However, as we head into April, I think Restaurant Brands stock and its 3.8% dividend yield will become much more attractive to investors looking for defensiveness at a time that could be difficult for the overall market. April is shaping up to be a month of volatility in the stock market. Those looking for a pocket of safe haven may want to consider Restaurant Brands, since its forming to be a top Canadian company for the month.
Next is Constellation Software (ticker symbol CSU). The TSX continues to be volatile, and that doesn’t seem to be changing anytime soon. But that doesn’t mean you have to ignore industries as a whole, even in the tech sector. Instead, strong companies with solid track records and balance sheets are where your attention should be. For that, I would go straight to CSU. The software company proves time and again that its growth-through-acquisition strategy is solid. It’s run by an incredible management team who knows just what to buy and what to leave alone. No wonder shares have climbed 230% in the last five years and 2,300% in the last decade! What CSU has that other tech stocks don’t is this track record of solid performance. And it remains a stable option, even as its peers crash around it.
Next is Hydro One (ticker symbol H). Hydro One is an electric utility company serving the province of Ontario. Hydro One is a great stock to hold to protect your portfolio from a continued selloff and an economic downturn. The company holds a monopoly share of Ontario’s transmission lines. It is poised to continue raking in sizable profits, even as the tides turn against the broader stock market. The 3.3% dividend yield is pretty interesting. Hydro One recently announced a new pilot project to bring high-speed internet access to as many as 1,450 homes and businesses in the municipality of Brighton. Great stock with potential ahead!
Next is BlackBerry (ticker symbol BB). Over the last year, BlackBerry’s stock price has declined 17% amid high volatility. Yet BlackBerry’s prospects look better than ever, with its award-winning technologies continuing to make headlines. For example, BlackBerry’s IVY platform for connected cars is seeing loads of interest from automakers. With BlackBerry hoping to have IVY ready to go into production by the end of this year, things could be heating up soon. As a high-quality player in the cybersecurity and embedded systems markets, BlackBerry has a bright future, and now is a good time to enter a position in my opinion.
Next is Open Text (ticker symbol OTEX). Open Text has a track record of increasing its top and bottom lines. Its three-year growth rates are as follows: revenue: 6.35%, adjusted earnings per share: 5.49%, operating cash flow per share: 6.49%. For the record, its 10-year total returns are about 14.6% per year on the TSX. Notably, the business grows by M&A, which could make its growth bumpy. The tech stock just corrected around 20% from its 52-week and all-time high and is undervalued. Also, Open Text is a Canadian Dividend Aristocrat that has increased dividends for about nine years on a sustainable payout ratio and growing earnings and cash flows. Its payout ratio is estimated to be below 30% this year, so it’s a good Canadian company to check out.
Next is Brookfield Renewable Partners (ticker symbol BEP.UN). It’s not too late to load up on renewable energy stocks. The sector has been red hot over the past two months, but there are still plenty of deals to be had. Shares of the $30 billion company are up more than 10% year to date compared to the Canadian market’s return of less than 5%. Still, Brookfield Renewable Partners is trading close to 20% below all-time highs set in early 2021. If you’re bullish on the long-term growth potential of renewable energy, now’s the time to invest. And with BEP trading at a bargain price today, this top energy stock is a good buy to look at.
Next is Topicus (ticker symbol TOI). Rising interest rates have made recurring revenue from software firms less valuable. That’s probably why Topicus has lost 39% of its value over the past five months. However, this downturn has also impacted the company’s potential acquisition targets. Put simply, Topicus can deploy more cash and get better valuations on small software firms in the near future, which should add tremendous value over the long term. Keep an eye on this company.
Next is Docebo (ticker symbol DCBO). Docebo stock is an attractive investment at current price levels, as the pullback (it has dropped about 44% from its high) created a solid entry point. Its organic revenues continue to grow rapidly, reflected through the strong annual recurring revenue growth rate. Further, the growing mix of its recurring subscription revenues, customer growth, high retention rate, and larger deal size are perfect for growth. Moreover, its large global addressable market, acquisitions, and marketing productivity would support its growth. Overall, the stock is reasonably priced at current price levels, while the company’s long-term fundamentals are intact.
Next is goeasy (ticker symbol GSY). The specialty finance stock, goeasy has been one of the best and most consistent growth stocks to own for years, so the fact that it’s been trading cheap for quite some time now makes it an opportunity you won’t want to ignore. During its most recent earnings report, it beat expectations, raised its guidance and increased its dividend by an incredible 38%. For years, it’s grown faster than Canadian bank stocks, and its business model has superior economics. Therefore, with goeasy currently trading roughly in line with the banks at a forward price-to-earnings ratio of around 12 times, it’s certainly one of the top Canadian stocks to buy in April.
Next and final stock, we have Lightspeed Commerce (ticker symbol LSPD). The stock that lost 80% value in the tech-stock selloff. The stock has bottomed out, even for Spruce Point Capital, who accused Lightspeed of reporting inflated financial metrics. Buying is returning to the stock market. Bargain hunters are buying undervalued stocks. Lightspeed’s revenue growth is likely to slow, as it moves from growing through acquisitions to growing organically. With organic growth of over 50%, an 8.5 times price-to-sales ratio makes the stock undervalued. This is a good time to buy this growth stock at a cheap price before investors start pricing in fundamentals.
Hope you guys enjoyed these Canadian stocks I went over and talked about. Please watch my previous videos on Canadian stock recommendations and let me know of any Canadian stocks you want me to look into and give my opinion on. Let me know in the comments, since I really want to expand my knowledge in the Canadian market. If you did enjoy this video, leaving a like really helps grow the channel! Thanks for watching, I’ll see you guys in the next video!