JWEL:CC - Which TSX Stock Is Best to Buy Today?
2024-06-27 16:20:00 ET
After all the uncertainty in both the stock market and economy over the last few years, investors have ample opportunities to buy high-quality TSX stocks today, many of which trade at attractive valuations.
However, one thing the last few years have also taught us is that owning high-quality and reliable businesses is essential for long-term investors, not just to help your money grow as efficiently as possible but also to give you the confidence that you can hold these stocks through thick and thin to give them enough time to reach their potential.
Every investor is different, and everyone has their own personal preferences. That said, though, you can never go wrong buying a high-quality defensive growth stock. These are stocks that offer both compelling long-term growth potential and are recession-resistant with robust operations.
So, with that in mind, here’s why I think Jamieson Wellness ( TSX:JWEL ), the impressive Canadian health and wellness company, is one of the very best TSX stocks to buy today.
Why is Jamieson one of the best TSX stocks to buy today?
In addition to what I mentioned above – that Jamieson is both defensive and has attractive long-term growth potential – one of the main reasons to buy the TSX stock today is that you can purchase it at a significant discount.
Most high-quality defensive growth stocks never trade that cheaply and, in fact, often trade at a premium. So, the fact that Jamieson offers so much value right now makes it a stock you won’t want to overlook.
Before we get to its attractive valuation, though, let’s look at why exactly it’s so reliable and why it has so much long-term growth potential.
Jamieson is a health and wellness company that develops, manufactures, distributes, and markets various products such as vitamins, minerals and supplements. These are products that, in many cases, are essential to consumers, which gives it a tonne of resiliency and allows much of Jamieson’s operations to be recession-resistant.
Plus, Jamieson doesn’t just make and sell these products; it’s the largest consumer health brand in Canada, and it has over 100 years of experience in the vitamin, mineral, and supplement business.
Furthermore, because of its significant operations and ability to scale costs, Jamieson even manufactures some products for other health and wellness businesses.
In terms of growth, Jamieson has a long track record of generating organic growth and making value-accretive acquisitions when they are most beneficial.
Furthermore, while its operations are significant and it’s the largest consumer health brand in Canada, it also has a tonne of potential to grow internationally, especially in the two largest economies in the world, the U.S. and China, which is another main reason it’s one of the best TSX stocks to buy now.
In fact, in just the last five years, its sales have grown at a compound annual growth rate (CAGR) of 16.2%. This has led to consistent gains in earnings before interest, taxes, depreciation and amortization (EBITDA), normalized earnings per share (EPS), and cash flow from operations, as well as its dividend.
Furthermore, with an aging population in North America and a consistently increasing focus on health and wellness by consumers, Jamieson operates in an industry with a tonne of natural growth potential, which is another significant reason why it’s one of the best TSX stocks to buy today.
How cheap is Jamieson stock today?
With Jamieson trading below $30 a share, it not only trades more than 25% off its all-time high, a significant discount for such a high-quality defensive growth stock, but it’s also trading at just 11.6 times its forward earnings.
That’s extremely cheap. A forward price-to-earnings (P/E) ratio of 11.6 times is low for any company, but especially one of Jamieson’s quality. Furthermore, its average P/E ratio over the last five years is 22.9 times, nearly double Jamieson’s value today.
Plus, with Jamieson trading so cheaply, its dividend yield has climbed to nearly 2.7%, which is also well above its five-year average of 1.8%.
Therefore, while this high-quality and reliable TSX stock trades so cheaply, there’s no question that it’s one of the very best stocks you can buy today.
The post Which TSX Stock Is Best to Buy Today? appeared first on The Motley Fool Canada .
Fool contributor Daniel Da Costa has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .
2024