Amid better-than-expected weekly jobless claims in the United States and optimism over the recent US$1.9 trillion stimulus package, the Canadian equity markets have continued their upward momentum. Yesterday, the S&P/TSX Composite Index hit a new all-time high of 19,037.13 before closing at 18,983.1, representing an increase of 8.9% for this year. Amid investors’ optimism, here are four Canadian stocks that you can buy with $50 to earn superior returns.
Canadian Natural Resources
The expectation of recovery in oil demand amid the ramp-up of vaccine distribution has pushed oil prices to pre-pandemic levels. Canadian Natural Resources (TSX:CNQ)(NYSE:CNQ), with its long-life,low-decline asset base, is well positioned to benefit from higher oil prices.
Further, industry experts are projecting oil prices to remain at elevated levels for the rest of this year. Meanwhile, the company’s management also expects its production to increase by 61,000 barrels of oil equivalent per day this year. Higher realization price and increased production could boost its financials and stock price in the coming quarters. Canadian Natural Resources also pays quarterly dividends, with its forward yield currently standing at 4.8%.
Amid increased legalization, growing awareness about its health benefits, and rising medical applications, the cannabis sector offers high-growth prospects. The change in regime in the United States has also given a significant boost to the industry. Meanwhile, BDSA projects global cannabis sales to reach US$55.9 billion by 2026, representing a compound annual grow rate (CAGR) of over 17%. Amid high-growth prospects in the cannabis sector, I have chosen Aphria (TSX:APHA)(NASDAQ:APHA) as my second pick.
The company has acquired a substantial market share in the Canadian recreational market and has reported positive adjusted EBITDA for seven consecutive quarters when most of its peers have failed to break even yet. Further, its proposed merger with Tilray could make the combined entity the world’s largest company by sales. Additionally, the merger could also deliver $100 million of savings within two years of completing the transaction due to synergies. So, given its growth initiatives and sectoral tailwinds, I am bullish on Aphria.
People are shifting to renewable resources to meet their energy requirements amid rising pollutions levels. Meanwhile, Frost & Sullivan expects global investments in renewable resources to reach US$3.4 trillion by 2030. This shift could benefit companies, such as Northland Power (TSX:NPI), which develop and operate renewable power generating facilities.
The company has planned to invest around $15-$20 billion over the next five years, doubling its power generating capacity and adjusted EBITDA. Along with these investments, acquisitions and diversified and contracted assets could drive Northland Power’s financials in the coming years. The company also pays monthly dividends, with its forward yield currently standing at 2.7%. So, given its attractive growth prospects, healthy dividend yield, and attractive valuation, I expect Northland Power to deliver superior returns this year.
Amid the ongoing pandemic, more people are working, learning, and shopping from their homes, which has increased the threat of cyber-attacks. So, cybersecurity spending could rise, benefiting Absolute Software (TSX:ABST)(NYSE:ABST), which specializes in endpoint security management. By the end of its recently announced second-quarter, the company had secured 11.5 million endpoints, representing a year-over-year rise of 18.6%.
Meanwhile, Absolute Software’s top-line also grew 16% during the quarter, while its adjusted EBITDA margin expanded from 24% to 27%. After its impressive second-quarter performance, the company’s management had raised its revenue and adjusted EBITDA guidance for fiscal 2021.
Boosted by its impressive second-quarter performance and a promising outlook, Absolute Software trades 23% higher for this year. Meanwhile, I believe the uptrend could continue, given a favourable environment, robust pipeline of products, and attractive valuation.
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned.