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

Train cars pass over trestle bridge in the mountains
Dividend Stocks

Is CNR Stock a Buy, Sell, or Hold for 2025?

Can CNR stock continue its long-term outperformance into 2025 and beyond? Let's explore whether now is a good time to…

Read more »

coins jump into piggy bank
Dividend Stocks

The Smartest Dividend Stocks to Buy With $500 Right Now

These top dividend stocks both offer attractive yields and trade off their highs, making them two of the best to…

Read more »

Middle aged man drinks coffee
Dividend Stocks

Here’s the Average TFSA Balance at Age 35 in Canada

At age 35, it might not seem like you need to be thinking about your future cash flow. But ideally,…

Read more »

ETF stands for Exchange Traded Fund
Dividend Stocks

How to Invest Your $7,000 TFSA Contribution in 2024

Here's how I would prioritize a $7,000 TFSA contribution for growth and income.

Read more »

a man relaxes with his feet on a pile of books
Dividend Stocks

CPP Pensioners: Watch for These Important Updates

The CPP is an excellent tool for retirees, but be sure to stay on top of important updates like these.

Read more »

Technology
Dividend Stocks

TFSA Investors: 3 Dividend Stocks I’d Buy and Hold Forever

These TSX dividend stocks are likely to help TFSA investors earn steady and growing passive income for decades.

Read more »

four people hold happy emoji masks
Dividend Stocks

Love Dividend Growth? Check Out These 2 Income-Boosting Stocks

National Bank of Canada (TSX:NA) and another Canadian dividend-growth stock are looking like a bargain going into December 2024.

Read more »

An investor uses a tablet
Dividend Stocks

A Dividend Giant I’d Buy Over Enbridge Stock Right Now

Enbridge stock may seem like the best of the best in terms of dividends, but honestly this one is far…

Read more »