If you’re looking for some of the best Canadian stocks to buy in June, here are three suggestions. In a context of rising interest rates and inflation, there is still money to make in the Canadian stock market.
Alimentation Couche-Tard
Recognized for its vast network of convenience stores, Alimentation Couche-Tard Inc. (TSX:ATD.B) has been successful in the Canadian market for some time now. Selling everything from snacks and groceries to tobacco, alcohol, and fuels for road transportation, Alimentation Couche Tard is a household name among investors in Canada.
Some of the brands which Alimentation Couche-Tard operates its convenience stores under include Mac’s, Ingo, Holiday, Couche-Tard, Corner Stone, Circle K and many more. The company has significantly expanded and diversified its offerings over the years, to incorporate additional services such as car washes, ATMs and bus ticket issuance.
Even though the current dividend is quite modest, it is practically guaranteed that it will increase significantly in the years to come, as Couche-Tard is growing fast and exponentially.
Couche-Tard is currently in the process of acquiring Petro Canada stations and the businesses of British retailer EB Group. Acquiring Petro Canada resources would be a remarkable addition for Couche-Tard, which has more than enough cash on the sidelines to make a splash in mergers and acquisitions.
Either way, investors have found comfort in Couche-Tard, which appears to be both a growth and a value bet. The shares are currently trading at 17.8 times earnings, which isn’t bad for a company that could double its bottom line in five years. Indeed, real, profitable growth is back in fashion, and that’s likely why Couche may still have more to run from here, even if the broader markets slump.
Couche-Tard has sufficient cash and credit to complete its largest acquisition to date. However, the management team is simply too disciplined to make an acquisition just because they have the financing to do so. Undoubtedly, there are many ways Couche-Tard can use its enviable liquidity position. There are many deals on the global stage that could help the company achieve its long-term profitability goals.
goeasy
Over the last half-decade, there has been an emergence in one particular niche industry within the financial sector and that is that of alternative lenders, which is due to strict lending restrictions imposed on major financial institutions in Canada. goeasy Ltd (TSX:GSY) is one of the best Canadian stocks within this niche.
One of the country’s most innovative financial service providers for consumers and businesses, goeasy markets itself as a unique type of bank. The Canadian small-capitalization company offers a wide range of loan and leasing services through its easyhome and easyfinancial divisions.
The company offers loans for a wide variety of products, including furniture, electronics, and appliances. goeasy has lent out more than $5 billion in loans since the company’s inception.
goeasy is committed to providing the most flexible and accessible secured and unsecured loans at consistently competitive interest rates in the Canadian market. Its mission is to improve the financial future of real Canadians, some of whom may have acquired subprime status due to problems with their credit history or financial history.
The company also continually strives to increase the credit scores of Canadian borrowers.
goeasy revenues have grown at a compound annual growth rate of 15.9% since 2011. From 2015 to 2020 the company doubled its revenue and had strong double-digit growth that continued in 2021. This confirms the fact that alternative lenders are gaining ground.
The company’s profits are even more impressive, as net profit since 2001 has grown at a rate of 31% per year.
The company is also increasing its dividend at one of the fastest rates in Canada. The company has an annual dividend growth rate of 35% over 5 years and has increased its dividends for 7 consecutive years, including the most recent increase of 45%.
If you’re looking for a higher growth game in the financial industry, goeasy is an excellent option. Despite a global pandemic, the stock has consistently provided excellent returns for investors.
As more Canadians turn to flexible and accessible banking services than ever before, goeasy proves that it has a bright future ahead of it. The subprime financial sector in particular looks set to continue growing and expanding over the next few years.
Royal Bank of Canada
One of the largest and oldest banks in the world, Royal Bank of Canada has operations in Canada, the United States, and in 40 other countries. When it comes to international banking, no Canadian bank is more exposed.
It is also a well-diversified bank, offering a variety of retail, corporate, wealth management, insurance, corporate, and capital markets services to millions of customers.
Royal Bank is currently the largest bank in the country and Canada’s largest company with a market capitalization near $190 billion. RBC has a national and international reputation as one of the best-managed and generally best-operated banks in the world.
On average over the past 5 years, the company has grown its revenue and profit in the mid-single digits. And with a dividend yield of around 3.3% and an 11-year dividend growth streak, RBC is one of the top dividend payers in the country.
The Canadian banking sector is one of the strongest investment sectors in the world, evidenced by the fact no Big 5 banks cut its dividend during the COVID-19 pandemic.
In fact, as soon as regulators allowed large institutions like Bank of Montreal, Bank of Nova Scotia, Toronto-Dominion Bank, National Bank of Canada, Canadian Imperial Bank of Commerce, and Royal Bank to increase the dividend, they did so almost immediately.
RBC fared better than most during the pandemic mainly due to the fact that it has the largest global exposure among all other banks. This has given it exposure to a multitude of economies at different stages of recovery.
Featured Image: Megapixl © Valterdias
