Avoid Stagnant Stocks: Aim for This Kind of High Growth

Stocks such as Whitecap Resources Inc. (TSX:WCP) are expecting high expected annual growth in earnings.

| More on:

From so-called sin stocks to potentially overlooked mining industry players, there are some high-growth tickers currently trading on the TSX index with a mix of low market fundamentals and healthy balance sheet stats. Let’s take a look at three of the best such stocks and see whether they might be suitable for mid-term capital gains investment.

Whitecap Resources (TSX:WCP)

One of the better potentially overlooked petroleum and natural gas stocks on the TSX, this sturdy Canadian ticker can boast a comparative debt level below the danger threshold at 38.9% of net worth; decent value for money is indicated by a P/B ratio of 0.5. A meaty dividend yield of 7.03% matched with a sizeable 57.9% expected annual growth in earnings make for a buy signal and indicate a decent addition to a passive-income portfolio.

Whitecap Resources insiders have bought more shares than sold them over the last few months, continuing a trend that’s persisted throughout the past year. Though down 8.32% in the last five days at the time of writing, this stock has been recovering gradually since December to the point that it is now trading with a P/E of 28.8.

Pollard Banknote (TSX:PBL)

Up 1.11% in the last five days, Pollard Banknote insiders have only sold shares in the course of last three months, making for a mixed signal. The share price has recovered considerably since December, though, and is unlikely to dip below the $20 mark. A diversified lottery and charitable gaming stock, TSX index investors may have overlooked this gem, which pays a small dividend yield of 0.51% and has a 23% expected annual growth in earnings ahead.

Though it has a so-so balance sheet with a debt level above the threshold of concern and is overvalued with a P/E of 27.8 and P/B of 5.1, a solid track record is indicated by a one-year past earnings growth of 30.1% and half-decadal rate of 25.5%. This latter characteristic bodes well for the future, making Pollard Banknote a good growth stock.

Major Drilling Group International (TSX:MDI)

With a focus on contract drilling services in the mining and exploration sector, Major Drilling Group International may be down 3.71% in the last five days, but it’s certainly now out. A strong track record is typified by a one-year past earnings growth of 26.1% and 18.4% five-year average, while Major Drilling Group International’s good balance sheet is indicated by a low level of debt at just 4.9% of net worth.

More shares have been bought than shed by Major Drilling Group International insiders over the last few months, while, trading at less than 50% of its future share flow value, Major Drilling Group International has a decent P/B ratio of 1.1. While no dividends are on offer here, growth investors have something to get excited about in a 103.3% expected annual growth in earnings.

The bottom line

With Major Drilling Group International topping the plus 100% high-growth stocks currently trading on the TSX index, is it the best of the three tickers listed here? Investors looking for some regular income from a growth stock could consider Whitecap Resources for its dividend instead, while Pollard Banknote offers a bit of both worlds.

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 Victoria Hetherington has no position in any of the stocks mentioned.

More on Dividend Stocks

profit rises over time
Dividend Stocks

These 2 Dow Stocks Are Set to Soar in 2025 and Beyond

Two Dow Jones stocks are screaming buys but Canadians must hold them in an RRSP or RRIF to avoid paying…

Read more »

TFSA (Tax free savings account) acronym on wooden cubes on the background of stacks of coins
Dividend Stocks

How to Use Your TFSA to Earn Ultimate Passive Income

If you have a TFSA, then you have the key to creating ultimate passive income. All you need is a…

Read more »

Confused person shrugging
Dividend Stocks

Better Buy: Fortis Stock or Hydro One Stock?

Let's do a compare and contrast of these two top utilities stocks right now, shall we?

Read more »

A close up color image of a small green plant sprouting out of a pile of Canadian dollar coins "loonies."
Dividend Stocks

Boost Your Passive Income: 2 Canadian High-Yielders at a Bargain

Nutrien (TSX:NTR) stock and another play that appear like fantastic dividend bargains in mid-November.

Read more »

3 colorful arrows racing straight up on a black background.
Dividend Stocks

TSX Stocks Soaring Higher With No Signs of Slowing

Three TSX stocks continue to beat the market and could soar higher in an improving investment landscape.

Read more »

Hourglass and stock price chart
Dividend Stocks

Goeasy Stock: Is It Heading for a 52-Week High?

Goeasy stock has been edging higher, especially after another record-setting earnings report. So are 52-week highs in sight?

Read more »

Piggy bank with word TFSA for tax-free savings accounts.
Dividend Stocks

Here’s the Average TFSA Balance at Age 44 in Canada

You can invest your TFSA in funds like the BMO Canadian High Yield Dividend ETF (TSX:ZDV) to grow the balance.

Read more »

Electricity transmission towers with orange glowing wires against night sky
Dividend Stocks

The Best Telecom Stock to Buy Before 2025

Choosing the safest stock from a decimated sector can be tricky, but if there is a reasonable chance of full…

Read more »