ALERT: These 3 Dividend-Growth Stocks Each Hit a Massive Buy Signal!

Alimentation Couche-Tard Inc. (TSX:ATD.B) and two other timely stocks could make you filthy rich.

| More on:

As Fools, we seek to buy wonderful businesses at wonderful prices (or even fair prices). If you’re not keen on swinging on such a “perfect” pitch, you may wish to improve your margin of safety (or risk/reward trade-off) further by ensuring that such wonderful businesses at wonderful prices also have stocks that have wonderful technicals.

Here are three such stocks that Canadians may want to swing at this December.

Shaw Communications

Shaw Communications (TSX:SJR.B)(NYSE:SJR) is Canada’s fourth major telecom player that’s hungry for the wireless market share of the Big Three incumbents.

Over time, I believe Shaw will be the beneficiary of significant share taking in the Canadian wireless scene, aided by the rollout of new telecom tech and regulatory hurdles that will be placed in front of Shaw’s competitors. Through the eyes of the Big Three, Shaw is a severe threat to the bottom line.

Shaw stock has a bountiful dividend that yields 4.4% and the capacity to support above-average annualized dividend growth moving forward. The stock is relatively cheap, given the magnitude of growth on the horizon, with shares trading at just 8.3 times EV/EBITDA at the time of writing.

To add the cherry on top of the sundae, Shaw stock has a very encouraging reverse head-and-shoulders reversal pattern that looks to be in the works. Such a pattern implies that the stock could hit $32 over the intermediate term, or around 18% upside from today’s levels.

Quebecor 

Sticking with the telecom theme, we have Quebecor (TSX:QBR.B), the telecom firm behind Vidéotron that’s essentially formed a moat around its home province of Quebec.

The company isn’t in a position to take a massive amount of share away from an incumbent like Shaw, but what the company does have is a deep penetration within its home market and arguably the highest brand loyalty of any telecom (thanks in part to the language barrier!).

“Quebecor isn’t trying to spread itself too thin by trying to dominate as much of the Canadian market as it can. It’s found its niche within Quebec, and with plenty of infrastructure to spend on, there’s really no point for the company to attempt to aggressively expand from coast to coast.” I said in a prior piece.

The seemingly wonderful business also trades at a stupidly low multiple, with shares trading at just 8.4 times EV/EBITDA and 13.8 times next year’s expected earnings.

Technically, the name is sound with the stock that’s on the verge of breaking out past its $33 level of resistance. Quebecor isn’t as technically sound as Shaw, but it’s still a timely bet, nonetheless.

Alimentation Couche-Tard

Finally, we have Alimentation Couche-Tard (TSX:ATD.B), the convenience store kingpin that’s grown by leaps and bounds through M&A. The company has a wonderful management team with CEO Brian Hannasch at the helm and an ambitious founder who sees Couche-Tard doubling its net income over the next five years.

Couche-Tard is a double-digit revenue and earnings grower with defensive characteristics, making it suitable to own in an economic downturn. Despite this, the stock trades at a mere 12.1 times EV/EBITDA (lower than the five-year historical average of 12.7 times EV/EBITDA), which is absurd given that the company is closing in on what could be the firm’s largest acquisition to date.

Even if Couche-Tard doesn’t bag Caltex, which would give Couche-Tard an excellent foundation in Australia, the company still has enough dry powder and the know-how to find other accretive acquisitions that will keep the stock surging higher now and over the long term.

Technically, Couche-Tard stock looks very strong with shares just beginning to break out.

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 Joey Frenette owns shares of ALIMENTATION COUCHE-TARD INC and SHAW COMMUNICATIONS INC., CL.B, NV. The Motley Fool recommends ALIMENTATION COUCHE-TARD INC.

More on Investing

think thought consider
Tech Stocks

Is CGI Stock a Buy Even With No Dividend Yield?

CGI stock may not have a dividend to speak of. But does that necessarily mean you should ignore this top…

Read more »

A robotic hand interacting with a visual AI touchscreen display.
Tech Stocks

Why Now Is the Time to Invest in Canadian AI Stocks

Are you looking for one of the most solid Canadian AI stocks out there? This one is probably your best…

Read more »

The letters AI glowing on a circuit board processor.
Tech Stocks

Why AI Stocks Should Be in Every Canadian Investor’s Portfolio

AI stocks continue to be one of the best options out there for long-term investing, especially when considering Canadian options.

Read more »

stock research, analyze data
Bank Stocks

Canadian Bank Stocks: Buy, Sell, or Hold?

There are opportunities and risks on the horizon for the Canadian banks.

Read more »

Young Boy with Jet Pack Dreams of Flying
Stock Market

Is Air Canada Stock a Good Buy After Its Q3 Results

Down almost 60% from all-time highs, Air Canada is an undervalued TSX stock that remains an enticing investment in November…

Read more »

cloud computing
Investing

Where to Invest $10,000 in November

Given their solid underlying businesses and healthy growth prospects, I expect these two defensive stocks to outperform uncertain outlook.

Read more »

coins jump into piggy bank
Retirement

Here’s the Average RRSP Balance at Age 44 for Canadians

Holding stocks like Alimentation Couche-Tard (TSX:ATD) in an RRSP is a good way to build your wealth.

Read more »

dividends can compound over time
Dividend Stocks

Want a 7% Yield? The 3 TSX Stocks to Buy Today

These TSX stocks are offering high yields of over 7%, making them attractive for investors seeking steady passive income.

Read more »