NVEI:CC - TFSA Superstars: Stocks That Can Transform Your Retirement
2023-08-12 10:15:00 ET
Retirement planning allows individuals to stock up enough money to maintain the same lifestyle after retirement. Meanwhile, investing in quality stocks could help you achieve these goals sooner. Also, one can save on taxes by making these investments through their TFSA (Tax-Free Savings Account). So, here are three top Canadian stocks you can add to your retirement portfolio right now.
Nuvei
My first pick is Nuvei ( TSX:NVEI ), which accelerates its clients’ businesses by facilitating them to accept next-generation payment methods. On Wednesday, the company posted a mixed second-quarter performance, with its top line coming in at $307 million — in line with estimates and a 45% increase from the previous year’s quarter. Its total volumes grew by 68% to $50.6 billion. Its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) increased by 19% to $110.3 million.
However, its adjusted EPS (earnings per share) fell from $0.51 to $0.39, below analysts’ estimate of $0.44. The decline was primarily due to increased finance expenses of $31.3 million. Further, the company slashed its 2023 guidance, sighting longer than anticipated lag times in new business and terminating its relationship with one of its large customers. The lower-than-expected second-quarter earnings and slashing of 2023 guidance appear to have led to a selloff, with the company losing around 39% of its stock value on Wednesday.
However, I believe the steep correction in Nuvei offers an excellent entry point, given its multi-year growth potential due to the growing adoption of digital payments. Its valuation looks attractive, with the payment processor trading 1.9 times analysts’ projected sales for the next four quarters.
Dollarama
Second on my list is Dollarama ( TSX:DOL ), a defensive stock with a growth tilt. Supported by its extensive presence across Canada and strong value proposition, the company continues to deliver solid sales growth even in this inflationary environment. The discounted retailer enjoys a quick sales ramp-up, with its new stores achieving an average annual sales of $2.9 million within two years of opening.
Further, the company has planned to add around 60-70 stores every year, thus increasing its overall store count to 2,100 by the end of 2031. It owns approximately 50.1% stake in Dollarcity, which plans to add over 400 stores in the next six years. So, the increased contribution from Dollarcity could boost its financials in the coming years. So, considering its solid underlying businesses and healthy growth prospects, I believe Dollarama would be an ideal addition to your retirement portfolio.
Enbridge
My third pick is a high-yielding dividend stock , Enbridge ( TSX:ENB ), which transports oil and natural gas across North America. Earlier this month, the company posted its second-quarter performance, with its adjusted EPS and adjusted EBITDA growing by 1.2% and 9.8%, respectively. It generated $3.9 billion of cash from its operating activities, while distributable cash flows stood at $3.2 billion.
Further, the midstream energy company is continuing with its $17 billion secured growth program and expects to put around $3.5 billion worth of projects into service this year. Along with these growth initiatives, its regulated midstream energy businesses could continue to generate strong financials, thus allowing it to reward its shareholders with consistent dividend growth.
Enbridge, which has raised its dividends for the previous 28 years, currently pays a quarterly dividend of $0.8875/share, translating its forward yield to 7.25%. Its financial position also looks healthy, with a liquidity of $12.4 billion as of June 30. So, considering all these factors, I believe Enbridge is an excellent choice for retirement planning.
The post TFSA Superstars: Stocks That Can Transform Your Retirement appeared first on The Motley Fool Canada .
Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nuvei. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy .
2023