Top 5 Canadian Stocks To Own Right Now

The S&P 500 climbed 13% over the past 12 months despite ongoing concerns about rising interest rates and trade wars, and several tech stocks crushed the market with triple-digit gains. Today we’ll take a closer look at three of those high-growth winners: 

Top 5 Canadian Stocks To Own Right Now: Unilever PLC(UL)

Unilever (NYSE:UL) is a familiar, international presence with consumer products across the spectrum. You certainly know all of the following: Dove, Knorr, Axe, Magnum, Lipton, Surf, Becel, Lux, Metadent, Pepsodent, Country Crock, Persil, Popsicle, Ben & Jerry’s, Breyer’s Vaseline and many more.

Unilever makes a ton of money. The company reported good numbers in its fourth-quarter earnings, with sales up 3.5%, operating margins up 110bps, earnings up 11% and free cash flow of 5.4 billion euros.

UL is concentrating on new channels: health and beauty, direct to consumer, e-commerce, and “experience stores.” By the way, UL is shoring up its pension, with a deficit of 3.2 billion euros now down to just 600 million. That means money to pay the dividend won’t be diverted.

UL only has two years of consecutive increases under its belt, but it pays a 3.2% dividend, which you could do worse than.

Top 5 Canadian Stocks To Own Right Now: Carnival Corporation(CCL)

Worries about rising fuel prices have pushed Carnival’s shares lower this year while helping lift its dividend yield back above 3%. However, there’s nothing in the cruise ship giant’s recent operating results to suggest that there is anything fundamentally wrong with the business.

On the contrary, sales growth just trounced management’s forecast for the second straight quarter thanks to healthy vacation demand. Carnival is also finding more ways to spur onboard spending, with that category up by double digits in the fiscal second quarter.

Sure, fuel costs will hurt profits if oil prices continue trending higher, but Carnival isn’t struggling to pass on its core expenses to its customers. In fact, management raised its full-year outlook on June 25, and it now expects net revenue yields to rise 3% while cruise costs (excluding fuel) expand by just 1%. 

Carnival Cruise ship Costa Fortuna moving through the ocean.

IMAGE SOURCE: CARNIVAL.

Over the long term, Carnival is aiming to lessen its exposure to oil prices by building more fuel-efficient ships. There are 18 of these vessels set to launch over the next five years, which should mark a steady pace that will protect profitability by matching supply growth with demand. Meanwhile, a bit of earnings volatility is a small price for investors to pay for an above-average yield and a strong underlying business.

Top 5 Canadian Stocks To Own Right Now: BeiGene, Ltd. (BGNE)

China isn’t just about tech stocks. One of the country’s largest biopharmas is an excellent ‘Strong Buy’ stock idea right now. BeiGene Ltd (ADR) (NASDAQ:BGNE) is making a name for itself with cutting-edge cancer treatments. Primarily these treatments, known as BTK inhibitors, can shrink or eliminate some B cell tumors by disrupting the BCR pathway.

Top Maxim Group analyst Jason McCarthy is very encouraged by recent clinical data for the drug Zanubrutinib. He writes “BeiGene remains on track to file two NDAs [new drug applications] this year. We believe the data continues to be highly encouraging for the BTK inhibitor and we see multiple catalysts ahead across the PTK, PD1 and PARP that should, if positive push valuation higher.”

Most encouragingly, he is clear that more upside potential lies ahead. BeiGene’s valuation has risen significantly over the last year, at around ~$9B. However, McCarthy believes that “With a BTK, PD1, PARP and a pipeline of assets, as well as a partner in Celgene and a foothold on the China oncology market, we see more upside in BGNE shares.”

Indeed, McCarthy’s $225 price target indicates huge upside potential of 46%. He is one of three analysts that have published recent buy ratings on BGNE.

Top 5 Canadian Stocks To Own Right Now: Procter & Gamble Company (PG)

In the consumer products space, it’s hard to find a bigger stock than Procter & Gamble. The company sports almost two dozen billion-dollar brands globally, with products like Pampers diapers and Crest toothpaste found in households around the world. The consumer giant is a member of the Dow Jones Industrial Average and generated revenue of more than $66 billion over the past 12 months, with a global presence few competitors can match.

On the dividend front, Procter & Gamble is also exceptional. The stock currently yields 3.7%, and the company has been generous in sharing its long-term growth with shareholders through regular dividend increases. For 62 straight years, shareholders in P&G have gotten annual payout boosts, including a 4% rise this past spring to $0.7172 per share quarterly. That not only makes P&G a Dividend Aristocrat, it also puts it among the top half-dozen stocks with the longest dividend-increase streaks in the market.

Procter & Gamble branded items like Charmin, Tide, Pampers, Bounty and Downy displayed together.

IMAGE SOURCE: P&G.

Procter & Gamble has experienced some struggles lately, which explain its slumping share price and rising yield. Yet the company has a long-term strategy that includes focusing on its most successful brands. That looks promising, and it creates an opportunity for would-be P&G investors to buy in at relative bargain prices in hopes of success over the long haul.

Top 5 Canadian Stocks To Own Right Now: Baozun Inc.(BZUN)

Shares of Chinese e-commerce services provider Baozun rallied more than 120% over the past 12 months. The company provides retailers with digital storefronts bundled with marketing, customer, fulfillment, and IT services, making it a "one-stop shop" for bringing businesses online in China’s bustling e-commerce market. It serves a wide range of clients, from small businesses to multinational giants like Nike.

The bears once claimed that Baozun would be rendered obsolete if Alibaba or JD.com, the two top e-commerce players in China, launched similar services for their marketplaces. But today, Alibaba, JD, and many other e-commerce websites integrate Baozun’s platform into their marketplaces.

Baozun’s revenue rose 22% as its non-GAAP net income surged 121%. On a GAAP basis, earnings climbed 141%. The company attributes that growth to rising transactions at its clients’ stores, an expanding number of brand partners, and its ability to cross-sell new services.

Analysts expect Baozun’s revenue and non-GAAP earnings to grow 27% and 68%, respectively, this year. Those are impressive growth rates, but the stock isn’t cheap at 46 times this year’s earnings.

Leave a Reply

Your email address will not be published. Required fields are marked *