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 May. 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.
The first pick is WELL Health Technologies (ticker symbol WELL). WELL Health is a digital health company that also operates a network of outpatient medical clinics. The company continues to deliver stellar sales growth and has posted positive adjusted EBITDA over the past several quarters. Despite the reopening following the pandemic, WELL Health continues to benefit from higher omnichannel patient visits. Also, shares are cheap today thanks to the recent selloff in high-growth tech stocks. Given the ongoing momentum in its business, WELL Health expects to deliver profitable growth in 2022, which is encouraging. Its diversified offerings, focus on acquisitions, strength in the U.S. segment, higher patient visit volumes, and extensive network of outpatient medical clinics bode well for growth and investors.
Next is Tamarack Valley Energy (ticker symbol TVE). Tamarack stock is up 29% in 2022 alone. Yet, I think there could be further upside for shareholders this year. It is a mid-cap oil and gas producer that operates in some of the most economic and efficient plays in Western Canada. This stock is earning an insane amount of cash. Tamarack just increased its dividend for June by 20%. It also announced the potential for an enhanced dividend and/or share buyback in the second quarter. Despite its high-quality assets and rapidly improving balance sheet, this oil stock is cheap at only 4.8 times excess cash flow. Great Canadian oil and gas producer company to check out.
Next is BMO Equal Weight Banks Index ETF (ticker symbol ZEB). First off, I really like financials especially bank stocks, they make money off our money so why not make money off their company also, pretty much a win-win situation. The Big Six Banks prove over and over why they’re a great investment: Investors enjoy protection during world events, strong share growth, dividends, and the peace of mind that the banks will probably be around for a good, long time. Rather than investing in each one individually, I would choose the BMO Equal Weights Banks Index ETF. You get the performance of the Big Six Banks, access to all their dividends, and the security of an ETF management team. Right now you can pick up this ETF with a dividend yield of 3.3%, which should give your portfolio solid protection in today’s volatile market., so be sure to check this great ETF out.
Next is Canadian Western Bank (ticker symbol CWB). Canadian Western Bank experiences greater volatility than its bigger banking peers which means it offers investors a better value when oil prices dip. Although Canadian Western Bank has reduced its loan exposure in Alberta over the years, it still has about 31% of its loans in the resource-rich province. Consequently, the bank stock dipped along with the price of oil. I believe shares should be able to trade for about $40 again in the future. Investors in the meantime get a discount and a 3.7% dividend yield.
Next is Descartes Systems Group (ticker symbol DSG). The tech stock has dipped almost 20% during the big industry sell off this year, but I think the shares are oversold and have significant upside as e-commerce and travel pick up seasonal speed in the second half of the year. The war in Ukraine has disrupted the global supply chain and created a short-term bearishness in the stock. Yet airline and marine shipments are re-routing, and industries are seeking new suppliers. All this calls for supply-chain optimization, creating a great opportunity for Descartes. As trade from alternate supply chains picks up, Descartes investors stand to profit.
Next is TMX Group (ticker symbol X). Why not just buy the company that runs the Toronto Stock Exchange right. TMX Group stock has beaten the market since 1999, and the company has some excellent fundamentals, such as a 53% operating margin and 33% profit margin. Earnings rose 22% in the most recent quarter from a year earlier, and revenue grew 15%. It also has some very attractive valuation metrics. The stock is currently trading below its 52-week high with a beta of 0.62, making it significantly less volatile than the market. TMX Group yields 2.57%, and the company increased the dividend to $0.83 per share back on March 11.
Next is ARC Resources (ticker symbol ARX). The energy crisis is still the theme for investors in the months ahead. Crude oil and natural gas are already trading at multi-year highs and could surge higher as Europe ignores Russian energy. Canadian producers like ARC Resources are expected to plug the gap. The stock is already up 126% over the past year, yet it’s still trading at just 13.5 times earnings. This upward trend could continue for the rest of 2022. Investors could also expect a surge in dividend payouts as the company’s cash flows improve. Keep an eye on this stock in May.
Next is Algonquin Power & Utilities (ticker symbol AQN). The utility stock can lend your portfolio both defensiveness and passive income, as well as market-beating growth potential. Shares of Algonquin Power are up a market-beating 45% over the past five years. And that’s not even including the company’s near-5% dividend yield, either. I’m not expecting market volatility to end anytime soon. So any investor who’s over-indexed in high-growth stocks would be wise to diversify a bit with a dependable utility stock like Algonquin Power.
Next is Tourmaline Oil (ticker symbol TOU).
Tourmaline Oil is set to report first-quarter earnings this morning, but you will probably see this video later in the day. The numbers will likely be far higher than last year, driven by natural gas’ epic ascent this year. The shares have rallied 160% since last year, outperforming peer energy stocks. Tourmaline’s strong free cash flows might enable another special dividend or a quarterly dividend hike. The company is already sitting on a cash hoard, with superior earnings growth in the last few quarters. The stock is trading at 10 times earnings, even after a steep rally. I think it can climb higher given the expected solid earnings growth, currently undervalued share price, and supportive macroenvironment. Great company to add to the watch list.
Next is Fortis (ticker symbol FTS). The market continues to be volatile, and I prefer to stick with reliable companies during times like these. For those that aren’t familiar, Fortis provides regulated gas and electric utilities to more than 3.4 million customers. Fortis shouldn’t experience any significant slowdown in its business in the coming months, so its revenue and earnings should remain stable. If anything, that’s a good starting point for investors to consider.
Next is Alimentation Couche-Tard (ticker symbol ATD.B). In the current volatile market, Alimentation Couche-Tard looks like the perfect safe haven. This undervalued stock has stable earnings and double-digit growth. Couche-Tard shares are undervalued, trading at just 17.6 times earnings per share compared with 21.3 for the TSX. In the company’s most recent quarter, net income increased by 25% — and this double-digit growth rate could be sustained as the global economy recovers from the pandemic. Couche-Tard has been increasing its dividend annually for more than a decade. Its five-year dividend growth rate is 19%, which is high compared with the average dividend-growth stock. Couche-Tard has a forward dividend yield of 0.8%. A top defensive Canadian company to check out.
Next is Canadian National Railway (ticker symbol CNR). Its stock fell sharply after the company’s first-quarter results missed estimates — even though CN Rail posted a 7.3% year-over-year rise in adjusted earnings for the quarter. Headwinds such as higher fuel costs, extreme winter conditions, the weak Canadian grain crop, and supply chain issues all affected the rail giant’s results. However, I consider most of these external factors temporary, which shouldn’t affect CN Rail’s long-term growth outlook. That’s why I think dividend investors should consider taking advantage of the recent dip to buy the reliable stock at a discounted price.
The final pick is Enbridge (ticker symbol ENB). Enbridge is one of Canada’s leading energy infrastructure companies, transporting and distributing oil and gas in its extensive North American pipeline system. I’m talking about it for a few reasons: rising oil and gas prices, rising dividends, and its current 6% dividend yield. Basically, Enbridge is firing on all cylinders, yet the stock price still does not reflect this, in my view. Looking ahead, Enbridge should continue to benefit from the bullish natural gas market, which is opening up to the global market through increased liquefied natural gas (LNG) exports as well as natural gas by-product exports. So, Enbridge is a solid pick for this late stage of the oil rally, when continued price gains are much less certain than they were before.
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!