14 BEST CANADIAN / TSX STOCKS TO BUY IN AUGUST 2022 | GROWTH AND INCOME

14 BEST CANADIAN / TSX STOCKS TO BUY IN AUGUST 2022 | GROWTH AND INCOME

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 August. 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 stock pick is Well Health Technologies (ticker symbol WELL), this omni-channel company is digitizing and transforming health care. The stock is back to mid-2020 levels, and we no longer hear much about this once high-flying company. But that doesn’t mean its investment opportunity has disappeared — in fact, it means you now have the opportunity to buy this health care tech stock on the cheap once again. The case for investing in Well Health is pretty simple, because the digitization of the health care system was never simply a pandemic phenomenon. It was and is, in fact, the future of healthcare. The company’s latest results show that this trend is alive and well despite investors’ loss of interest: Last quarter, revenue rose 395%, and the company expects next quarter’s revenue to double. You might want to grab shares of this Canadian small cap stock before it gets any bigger.

Next is MDA (ticker symbol MDA), the company develops and sells advanced space technology and services. The space race is heating up. China has been rapidly expanding its modular space station and is even planning missions to the moon and Mars. The European Space Agency and the U.S.’s National Aeronautics and Space Administration (NASA) are ramping up several space missions scheduled for the months ahead. Canadian space tech giant MDA could provide vital services and instruments for these future missions. It’s already developing the Canadarm 3, a robotic arm for the NASA lunar gateway mission Artemis II. NASA expects to launch Artemis I on August 29. If that mission is successful, it could improve the chances of Artemis II, which could serve as a tailwind for MDA stock. MDA currently trades at 1.96 times annual sales, which makes it a relatively cheap bet on the development of an exciting new industry.

Next is Freehold Royalties (ticker symbol FRI). It earns royalties from energy companies that produce oil and natural gas on its properties in Western Canada and the United States. With energy prices and, consequently, energy stocks pulling back from their highs over the last six weeks, now is an excellent time for you to buy the dip. In Freehold Royalty‘s case, the stock has fallen roughly 20% from its high, and it seems as if a recession is already priced into the shares. Investing in Freehold now not only allows you to start (or add to) a position while the shares are undervalued, but you can also lock in Freehold’s attractive 6.9% dividend yield. And with the stock expected to earn about $1.89 of free cash flow per share this year, Freehold’s current payout ratio is just 51%. Given this impressive value, Freehold is one of the best TSX stocks to buy right now in my book.

Next is Cargojet (ticker symbol CJT). It is Canada’s leading time-sensitive air cargo service provider. Flying anywhere is a nightmare this summer — for passengers at least. But as passenger airlines that also carry cargo in their bellies are struggling with staff shortages, dedicated freighter service providers like Cargojet are likely to capitalize on the spike in demand. Its growth runway looks good: Despite the softness in e-commerce trends, Cargojet’s revenue rose 43% in Q2. Adjusted EBITDA and free cash flows increased at a double-digit rate. And with continued momentum in its ACMI (Aircraft, Crew, Maintenance, and Insurance) and charters businesses, Cargojet has had success diversifying its revenue base. The company continues to expand the list of customers it serves, which includes DHL, Canada Post, Amazon, and UPS. Finally, Cargojet’s balance sheet is in strong shape, with leverage at an all-time low. You just might want to invest in Cargojet before its shares take flight.

Next is Winpak (ticker symbol WPK). It makes and distributes packaging material throughout North America and around the world. Winpak has been one of the few winners on the TSX lately. It’s thanks to the company’s vast partnerships with companies around the world, providing packaging for products as diverse as fresh produce and machinery. Packaging is one of those stable industries that will continue to be necessary, no matter what happens to the economy — which is why Winpak remains a great buy today even as it climbs ahead of the rest. Shares are beating the index and are up 27% year to date. While the stock isn’t in value territory, trading at about 20 times earnings, sometimes the best investments you can make are in excellent companies that don’t seem cheap by traditional standards. Net income rose 18% year over year in the company’s most recent quarter, even as inflation weighed on earnings. Management expects the positive growth in sales will continue for the rest of the year.

Next is Choice Properties REIT (ticker symbol CHP-UN). It is Canada’s largest REIT with a portfolio of 701 properties. About 79% of its assets are retail, and the remaining are industrial and residential. While most Canadians have been absorbed with news about the housing market, shares of Canada’s biggest real estate property trust, Choice Properties, have quietly slipped about 12% from their April high, which looks like a deal to me. Rising interest rates pulled down the fair market value of Choice’s assets in the second quarter, putting downward pressure on the shares. But the change in Choice Properties’ stock price doesn’t affect its rental income: it renewed 42 out of 44 retail leases with its largest tenant, Loblaws, for 7.7 years. The renewed leases have an average rent hike of 5%. The REIT also sold six office buildings to Allied Properties, which will reduce its rental income but not its distributions. Investing now will get you a 5.3% distribution yield, along with the chance for your investment to grow during the long term.

Next is B2Gold (ticker symbol BTO). It is an international senior gold producer that operates in West Africa. Driven by the strength of the U.S. dollar, gold prices have been notably weak this year. This has pushed gold mining stocks like B2Gold to 20-month lows. Although gold prices may not recover right away, patient investors could do well by investing in this hard-hit sector today. B2Gold stock is trading for about 9 times earnings, which is way discounted compared with peer gold miner stocks. Plus, at 4%, it offers one of the highest dividend yields across the board. If the Fed changes its aggressive stance for the rest of the year and reverses interest rate hikes, gold prices will likely move toward record levels. In that case, gold stocks like BTO could experience superior financial growth — and rallying stock prices.

Next is Canadian Utilities (ticker symbol CU). It is an electric and gas company. I’m a big fan of low-beta stocks, ones that have less volatility compared with the overall market. A great pick here is Canadian Utilities, which currently has a five-year monthly beta of 0.56. Compared with the overall TSX, Canadian Utilities is about half as volatile, making it a good core portfolio holding. The company is also a long–standing dividend aristocrat, having paid out and grown dividends for a consecutive 50 years! Currently, the stock pays a forward annual dividend yield of 4.51%, with a five-year average dividend yield of 4.67%. This is much higher than the TSX utility sector average. If you’re seeking passive income from your investments, Canadian Utilities should be on your shopping list.

Next is Brookfield Renewable Partners (ticker symbol BEP-UN). It is a world-leading renewable energy provider with hydroelectric, wind, solar and storage facilities. The world continues to shift toward renewable sources of energy. Brookfield Renewable Partners is one of the companies enabling that shift. This company operates a diverse portfolio of facilities capable of generating more than 21 GW of renewable power. Brookfield Renewable estimates that it will more than double its current generation capacity after it wraps up some current construction projects. In terms of its stock performance, Brookfield Renewable has been exceptional. Since its IPO, this stock has generated a compound annual growth rate (CAGR) of 17%. In addition to its outstanding capital appreciation over the years, the company has managed to establish itself as a reliable dividend stock. This makes Brookfield Renewable a suitable candidate for growth and dividend portfolios alike. Over the past 11 years, Brookfield Renewable has grown its dividend at a CAGR of 6%.

Next is George Weston (ticker symbol WN). This holding company operates two subsidiaries: Loblaw, the largest grocer in Canada, in which it has a controlling stake; and Choice Properties REIT. The company is returning money to shareholders. Under an automatic share-buyback plan announced earlier this summer, the holding company will repurchase about 5% of its shares until May 24, 2023. It has ample cash to do so: Late last year, George Weston began to focus on its retail and real estate businesses, selling the fresh and frozen portion of Weston Foods in October 2021. The sale added about $1.57 billion to its balance sheet. Canadians’ gradual return to work throughout 2022 should increase consumer demand for beauty and cosmetic products, which are some of the higher-margin goods the company sells. In addition, rising traffic to its drug stores should increase same-store sales.

Next is Fortis (ticker symbol FTS). It supplies electricity across Canada, the U.S. and the Caribbean. Fortis is exactly the type of stock you want to own when markets are shaky. As a utility, it enjoys highly stable revenue. In its most recent quarter, FTS managed 1.2% earnings growth and 11.6% revenue growth. (If 1.2% earnings growth doesn’t sound impressive to you, remember that the first quarter was a tough one for many banks, tech firms, and airlines. Many of those stocks saw their earnings decline in the same period. Energy stocks and utilities like Fortis did comparatively well.) Fortis is well known for its steady and consistent dividend, which yields about 3.6%. Management aims to increase the dividend by 6% per year over the next five years. So, if you buy it today, and everything goes well with the company, your income from holding FTS stock could grow significantly. In a frantic market like this one, it might be just the right asset to calm your nerves.

Next is Brookfield Infrastructure Partners (ticker symbol BIP-UN). It is a global leader in operating, managing, and acquiring diversified essential infrastructure assets. If you are worried about high inflation, Brookfield Infrastructure Partners is a top stock to own. The company is naturally hedged because it owns essential assets that are geographically diversified. As a result, it earns consistent cash flows. More than 70% of its assets have inflation-hedged contracts. When inflation soars, so too does its contracted rates of cash flow. In addition, it benefits from higher volumes of commodities and goods through its midstream, export, shipping, and railroad networks. If we hit a recession, BIP can use its strong balance sheet to swipe up assets at cheaper valuations. It did this in 2009 — and it’s driven nearly 700% total returns since. For a combination of attractive dividends (3.7% yield), solid growth, and defensive qualities, BIP is a top stock to buy today.

Next is Brookfield Asset Management (ticker symbol BAM.A). This asset manager focuses on real estate, renewable energy, infrastructure and private equity assets. Although shares have bounced back a bit from last month, Brookfield Asset Management (TSX:BAM.A) remains undervalued, and now is a great buying opportunity for investors who are looking for long-term price appreciation. Based on the current valuation, the analyst consensus price target represents near-term upside potential of about 39%. The company’s dividend yield of about 1.2% is a bonus on top of that because most of the returns from the stock should come from price appreciation. BAM is planning to spin off its asset-management business by the end of the year, which is expected to create value for shareholders.
Next and final stock is Canadian National Railway (ticker symbol CNR). The railroad operator has nearly 33,000km of track and rail spanning from British Columbia to Nova Scotia. Canadian National Railway is the only railway in Canada and the United States with tracks connecting ports on three coasts. The company just showed investors that it has the power to pass rising costs through to customers — an important consideration for investors seeking top stocks to buy in an era of high inflation. CN generated record revenue of $4.34 billion in the second quarter of 2022, up 21% from the same period a year earlier. Operating income jumped 28% and earnings per share (EPS) rose 30% on an adjusted basis. Management confirmed guidance for 15-20% EPS growth this year and for free cash flow of $3.7 billion to $4.0 billion. All that cash could support a generous dividend increase in 2023, and CN has already raised the payout by 19% for 2022. CN stock is off its recent low, but the shares are still attractive for a buy-and-hold investor today.

Hope you guys enjoyed these Canadian stocks, these have a good amount of potential ahead so if interested make sure to always do your own due diligence before investing into any of the mentioned companies. If interested in more Canadian tools for your investing, check out the kofi link in the description to get access to my custom excel of my stock portfolio and my holdings. I also have a free Canadian investing blog for investors if you prefer reading over videos, head over to unwiz.com if interested. 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, and you also expand your own knowledge by asking questions. It is a win-win situation. 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!


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