Spring Sale
Amid the ongoing Russia-Ukraine war, oil prices have increased to over $100/barrel. Investors are concerned that the rising oil prices could further drive inflation higher, thus leading to volatility in the market. Given the uncertain outlook, I expect the following three Canadian stocks to outperform this year.
goeasy
Amid the weakness in growth stocks, goeasy (TSX:GSY) has lost over 16% of its stock value this year. The correction offers an excellent buying opportunity. With the increase in economic activities amid the expansion of restrictions, loan originations could increase, benefiting the company. Meanwhile, goeasy is also strengthening its digital channels, increasing its penetration, and expanding its geographical presence, which could boost its growth in the coming quarters.
Further, the acquisition of LendCare has added new business segments and diversified its risk profile. So, goeasy’s growth prospects look healthy. Notably, the company still trades on an attractive forward price-to-earnings multiple of 12.6. It has also been rewarding its shareholders by raising dividends consistently. Over the last seven years, it has hiked its dividends at a compound annual growth rate (CAGR) of 34%.
Meanwhile, analysts look bullish on the stock. Out of the eight analysts covering the stock, seven have issued a ‘buy’ rating. Their consensus price target represents an upside potential of over 40%. So, I believe goeasy to be an excellent addition to a growth portfolio.
Suncor Energy
Amid the concerns over supply disruption during the Russia-Ukraine conflict, oil prices are trading close to seven-year highs. Higher prices could benefit oil-producing companies, such as Suncor Energy (TSX:SU)(NYSE:SU). Amid the rising oil prices, the company’s stock price has increased by an impressive 88.6% since the beginning of 2021. However, I believe the rally is not over yet, given its growth potential and attractive valuation.
Suncor Energy expects its production in 2022 to increase by 5%, while its refinery utilization rate could also increase amid the growing demand for petroleum products. In addition, its cost-cutting initiatives, lower debt, and share repurchase program could also contribute to its financial growth in the coming quarters. Despite the recent surge, the company currently trades at an attractive forward price-to-earnings multiple of 8.1.It also pays quarterly dividends, with its forward yield is attractive at 4.33%.
Meanwhile, analysts are also optimistic about Suncor Energy. Of 22 analysts, 14 have given a ‘buy’ rating, while eight have issued a ‘hold’ rating. Their consensus price target represents an upside potential of around 15%.
Cargojet
My final pick is Cargojet (TSX:CJT), which is trading 10% higher for this year. Meanwhile, I expect the upward momentum to continue. The growth in e-commerce and easing of restrictions could boost demand for the company’s services in the coming quarters. Meanwhile, the company is expanding its fleet and adding new routes to meet the rising demand.
Its long-term contracts and unique overnight delivery service to prominent Canadian cities give it an edge over its peers. So, its outlook looks healthy. Meanwhile, the company also pays a quarterly dividend of $0.26, with its forward yield standing at 0.6%.
Analysts are also bullish on Cargojet, with 11 of the 12 analysts covering the stock having issued a ‘buy’ rating. Their consensus price target represents an upside potential of over 30%.
