Who Tops the Canadian Stock Market with the Dawn of 2021?

The year 2020 has seen the stock market plummet in March and then pick up almost immediately for some industries and companies. With the massive job losses and disrupted global economy, the pandemic has triggered an unexpected investing revolution with brand new investors appearing on the scene.

With most of the population confined in their homes, the iGaming industry is one of the sectors that recorded tremendous growth. Online casino platforms became the go-to option for gamblers as land-based gaming houses were closed, and when reopened, they started operating at limited capacities. While traditional gaming establishments have continued to see a slight revenue drop of -1.2% in the past five years, the iGaming industry is steadily rising at a healthy rate of around 5% per year, with double-digit growth recorded last year. 

In Canada, gaming platforms are also pushing harder due to the increased competition from international competitors. It’s no wonder why you’ll see Canadian internet gaming sites offering deals such as the Vulkan Vegas casino bonuses to continue attracting even more players. With the continued competition, we can expect to see more iGaming companies join the stock market as publicly traded companies to follow the footsteps of gaming giants like the Stars Group.

Gaming aside, the stock market is an extremely volatile space, and therefore, a lot of research and discretion is required if you are planning to invest in any of the companies. As of January 2021, the following companies have shown considerable promise in terms of reliable dividend payout and/or steady growth:

Canadian National Railway (CNR)

One of the two railway corporations enjoying a duopoly in Canada, CNR has a resilient stock that is not only attractively valued but also has a high yield of about 1.8%. For more than a year, Bill Gates has been the largest single shareholder of CNR stock. With a market cap of CAD90 billion and multiple rail routes connecting three North American coasts, CNR is here to stay.

Toronto-Dominion Bank (TD)

The Toronto-Dominion Bank provides banking products and services in Canada and the United States. If you’re looking for a high-yielding and attractive dividend stock, TD is the ideal place to invest. With a 4.32% dividend yield and a continual increase in dividend, which averages 9.68%, Toronto-Dominion Bank expects solid earnings growth. It has a market cap of C$136.28 billion.

Algonquin Power and Utilities Corporation (AQN)

Based on valuations, this relatively lowly priced stock has been rated ‘hold’, hence great for long-term investment. It also has an attractive dividend and has held up well during the pandemic. Algonquin is primed for growth as the renewable portion of the company is expected to soar pretty soon, following the company’s plans to expand. Their dividends have a health yield of 3.57%, and the company has a market cap of approximately C$13.2 billion.

Brookfield Asset Management (BAM)

This is one company that quickly recovered from the ultimate low prices that hit the stock market in early 2020, thanks to steady rent collection from its real estate businesses, steady numbers from its renewable energy and infrastructure businesses and a pickup in volumes from ports and toll road businesses – which had taken a hit earlier in the year because of the Coronavirus lockdown. With a market cap of C$65 billion and several strategic decisions that have seen the company acquire more assets, it is well-positioned for growth, meaning that it’s a good buy.

Manulife Financial Corporation (MFC)

This one stock that most enthusiasts have claimed is undervalued. However, investors need to tread carefully even though the dividends look extremely attractive and that the company’s business model seems solid. This stock may prove worth it for long term investors. Manulife has a market cap of C$47.9 billion.

Suncor Energy Inc.

This is another reasonably priced stock that may prove attractive for buy-and-hold investors. It goes without saying that 2020 was the worst oil year ever, hence the drop in the stock price, but it has started to pick up again as oil demand starts to rise in 2021. This makes the ideal time to add Suncor to your portfolio. The dividends in 2020 suffered a slash, but the current payout provides a yield of 4%. The market cap is currently C$27.17 billion.

Royal Bank of Canada (RY)

Despite uncertainty due to the covid-19 pandemic, the Royal Bank of Canada was able to pay a quarterly dividend of $1.08 per share, representing a yield of 4.5%. This is another stock that looks promising, but investors should tread carefully. The Royal Bank is the largest financial institution in Canada, with a market cap of C$152.37.

Don’t Forget About iGaming

These are just seven stocks to consider in 2021, but it doesn’t mean that you can’t bet on others. Again, given the steady growth in the iGaming industry, it has investment opportunities worth considering as the sector continues with its upward trajectory. Just remember that whichever way you decide to go, caution and patience are key in this market. Make sure that you conduct thorough research before embarking on any investment venture.

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