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Yahoo
11 hours ago
- Business
- Yahoo
3 Utility Stocks That Could Help Set You Up for Life
Written by Daniel Da Costa at The Motley Fool Canada If you're looking to build long-term wealth with as little stress as possible, utility stocks are unquestionably some of the best investments you can make. They may not be flashy or fast-moving, but that's exactly what makes them so attractive for long-term investors. Utility companies provide essential services such as electricity, natural gas, or water and that consistent demand gives them some of the most stable and predictable revenue streams in the market. Because of that stability, utility stocks are ideal for conservative investors or anyone focused on generating reliable, long-term returns. They tend to hold up well during economic downturns, they often pay steady and consistently growing dividends, and many are backed by regulated frameworks that reduce volatility and help mitigate risk even further. Therefore, because these stocks have predictable revenue and are consistently investing in future growth, they aren't just defensive stocks. In fact, the best utility stocks still offer solid growth potential over the long haul. These stocks increase earnings every year, which consequently allows them to increase their dividend payments, allowing the share price to follow suit. And when you combine that long-term upside with steady income and recession resistance, utility stocks become one of the best core stocks for your portfolio. So, if you're looking to boost your income or shore up your portfolio, here are three of the best utility stocks to buy now. If you're looking for a solid utility stock to buy now, there's no question that Emera (TSX:EMA) and Fortis (TSX:FTS) are two of the best in Canada. Both stocks provide both electricity and gas services to their millions of customers, and each company has diversified operations all over North America. This diversification is crucial because it takes an already low-risk industry and helps to reduce risk even more. However, while both Fortis and Emera have many similarities, the main difference between the two stocks today is their dividends. Currently, Fortis is expecting to increase its dividend between 4% and 6% annually through 2029, while Emera expects to increase its dividend by 1% to 2% annually over the next few years as it works to shore up its balance sheet and reduce its payout ratio. However, while Fortis offers more dividend growth potential over the coming years, it has a lower yield today. Right now, Fortis is offering investors a yield of roughly 3.8%, compared to Emera's current yield of 4.7%. Fortis also has a much longer track record of consistent dividend increases. While Emera's 18-year streak is impressive, Fortis has increased its dividend every year for half a century. So, although they are both two of the top utility stocks you can buy on the TSX, the slight edge still goes to Fortis unless you're looking for a higher-yield stock with the same level of reliability. In addition to Fortis and Emera, another top utility stock to consider adding to your portfolio today is AltaGas (TSX:ALA). AltaGas is one of the more unique utility stocks in Canada, offering a mix of traditional utility operations and high-potential energy infrastructure. It owns regulated natural gas utilities in the U.S., but it also has a large midstream energy segment focused on natural gas processing, exports, and storage. This diversified model makes AltaGas a reliable investment while also giving it the potential to grow faster than a regular utility stock. Its utility business provides steady cash flow and earnings visibility, while the midstream business offers upside tied to global demand for North American energy, particularly the growing Asian market, where AltaGas exports energy through its Ridley Island terminal. Furthermore, in recent years, AltaGas sold off a ton of non-core assets and strengthened its balance sheet significantly, which is why it's now one of the best utility stocks to buy and hold for the long haul. Finally, not only does it offer a yield of 3.3%, but AltaGas keeps that dividend sustainable by targeting a payout ratio of roughly 60%. So, if you're looking for a high-quality utility stock to buy now and hold for years, AltaGas is certainly one you'll want to consider. The post 3 Utility Stocks That Could Help Set You Up for Life appeared first on The Motley Fool Canada. Before you buy stock in Altagas, consider this: The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Altagas wasn't one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years. Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the 'eBay of Latin America' at the time of our recommendation, you'd have $24,927.94!* Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 30 percentage points since 2013*. See the Top Stocks * Returns as of 6/23/25 More reading Made in Canada: 5 Homegrown Stocks Ready for the 'Buy Local' Revolution [PREMIUM PICKS] Market Volatility Toolkit Best Canadian Stocks to Buy in 2025 Beginner Investors: 4 Top Canadian Stocks to Buy for 2025 5 Years From Now, You'll Probably Wish You Grabbed These Stocks Subscribe to Motley Fool Canada on YouTube Fool contributor Daniel Da Costa has no position in any of the stocks mentioned. The Motley Fool recommends Emera and Fortis. The Motley Fool has a disclosure policy. 2025
Yahoo
20-06-2025
- Business
- Yahoo
3 TSX Stocks to Build Wealth Over the Next Decade
Written by Jitendra Parashar at The Motley Fool Canada Building long-term wealth in the stock market is less about reacting to day-to-day news and more about filtering out the noise and sticking to your plan. In addition, it mainly requires patience and, above all, fundamentally strong stock picks. Even with the at all-time highs, the market still has plenty of great opportunities. In fact, I find many of Canada's strongest companies undervalued based on their long-term growth prospects. In this article, I'll cover three TSX-listed stocks that could offer serious upside in the long run and are worth holding onto. The first stock that could fit nicely in a long-term investor's portfolio is TFI International (TSX:TFII). This transportation and logistics giant, with operations across Canada, the U.S., and Mexico, has been through a rough patch lately. TFI stock is currently trading at $123.87 per share, with a market cap of about $10.3 billion and a quarterly dividend with a nearly 2% annualized yield. TFI reported a dip in earnings in the first quarter of 2025 as weak freight demand weighed on its results. But it still managed to post a 5% YoY (year-over-year) rise in its total revenue to US$1.96 billion with the help of new acquisitions like Daseke, which boosted its truckload segment's performance. More importantly for long-term investors, TFI continues to generate strong free cash flow and remains committed to rewarding shareholders through dividends and buybacks. With a disciplined strategy and growing presence in North America, this logistics stock has the potential to see a bounce back and deliver solid gains over the next decade. The second TSX stock worth a look for patient investors right now is Boyd Group Services (TSX:BYD), which is a major player in the auto collision and glass repair business across North America. The company recently posted mixed first-quarter results, with its revenue slipping 1% YoY to US$778.3 million. But despite softer demand, it gained market share and managed to improve gross margins to 46.2% due mainly to better pricing and in-house service expansion. Interestingly, Boyd's new leadership is currently focusing on a cost-cutting strategy to unlock $100 million in savings by 2029. Boyd stock is currently trading at $206.11 per share, giving it a market cap of about $4.4 billion. The stock has slipped about 23% over the last year, but with a long-term annual revenue target of US$5 billion, it could reward patient holders in the years ahead. Rounding out this list of long-term TSX opportunities is Richelieu Hardware (TSX:RCH), a firm that supplies specialty hardware and complementary products to manufacturers and retailers across North America. RCH stock is currently trading at $34.77 per share with a market cap of about $1.9 billion and offers a modest annualized dividend yield of 1.8%. While it has dropped nearly 13% over the last 12 months, Richelieu remains focused on long-term growth moves. In the first quarter of 2025, the company's sales rose 8.6% YoY, supported by five new acquisitions that expanded its presence in both Canada and the United States. It also continues to invest in retail and distribution upgrades, preparing itself for future demand. Moreover, for long-term investors, Richelieu's disciplined expansion strategy and consistent cash generation could make it a solid compounder over time. The post 3 TSX Stocks to Build Wealth Over the Next Decade appeared first on The Motley Fool Canada. More reading Made in Canada: 5 Homegrown Stocks Ready for the 'Buy Local' Revolution [PREMIUM PICKS] Market Volatility Toolkit Best Canadian Stocks to Buy in 2025 Beginner Investors: 4 Top Canadian Stocks to Buy for 2025 5 Years From Now, You'll Probably Wish You Grabbed These Stocks Subscribe to Motley Fool Canada on YouTube Fool contributor Jitendra Parashar has no position in any of the stocks mentioned. The Motley Fool recommends Boyd Group Services, Richelieu Hardware, and TFI International. The Motley Fool has a disclosure policy. 2025 Sign in to access your portfolio
Forbes
31-05-2025
- Business
- Forbes
5 Top Undervalued Stocks To Buy For June 2025
The market's current volatility has created compelling opportunities for discerning investors willing to look beyond short-term noise. While headline indexes remain near historic highs, numerous quality companies are trading at significant discounts to their 52-week peaks, presenting attractive entry points for long-term wealth building. These dislocations often occur when broader market sentiment overshadows individual company fundamentals, creating the exact conditions where patient investors can capitalize. This analysis identifies five fundamentally strong companies currently trading at compelling valuations. Each selection represents a different sector, offering diversification benefits while maintaining focus on established businesses with durable competitive advantages, consistent cash generation and shareholder-friendly management teams that have weathered multiple economic cycles. The selection process prioritized companies trading at least 10% below their 52-week highs while maintaining strong underlying business fundamentals. Key evaluation criteria included consistent profitability, reasonable debt levels, competitive market positions, and management teams with proven track records of capital allocation and effective financial management. Special attention was given to dividend sustainability and growth potential, as these metrics often indicate management confidence in future cash flows. Additionally, each company needed to demonstrate resilience during recent market turbulence while showing clear catalysts for future growth. The focus remained on large-cap, established enterprises rather than speculative plays, ensuring each selection offers both value characteristics and quality business attributes that should appeal to conservative investors seeking both income and appreciation potential. ExxonMobil stands as America's largest publicly traded oil company, operating across the entire energy value chain, from exploration and production to refining and chemicals. The company has transformed its operational focus over recent years, prioritizing high-return, low-cost assets while maintaining one of the industry's strongest balance sheets. Recent strategic initiatives include expanding low-carbon solutions and optimizing its Permian Basin operations, which continue generating substantial free cash flow even at moderate oil prices. The company's integrated business model provides natural hedging between upstream and downstream operations, while its world-class refining network benefits from favorable crack spreads. Management has demonstrated disciplined capital allocation, returning significant cash to shareholders through both dividends and share repurchases while maintaining the financial flexibility to invest in growth opportunities. Exxon's current valuation appears compelling given its strengthened operational efficiency and commitment to shareholder returns. The company trades at a meaningful discount despite generating robust cash flows and maintaining a fortress balance sheet with minimal debt concerns. Recent quarterly results demonstrated the effectiveness of the company's cost reduction initiatives, with strong margins achieved across all business segments. The energy transition presents both challenges and opportunities, but Exxon's low-carbon investments and carbon capture initiatives position it well for evolving market demands. The company's dividend yield of 3.86% appears sustainable based on current cash generation capabilities. In comparison, the stock's 18.7% discount from recent highs creates an attractive entry point for investors seeking exposure to the energy sector through a financially stable, dividend-paying leader. Fifth Third Bancorp operates as a diversified financial services company serving customers across the Midwest and Southeast through approximately 1,100 locations. The bank has established a reputation for prudent risk management and exceptional customer service, consistently maintaining strong credit quality metrics across various economic cycles. Recent strategic focus areas include digital transformation initiatives, commercial lending growth, and expansion of fee-based services, including wealth management and payment processing. The bank's geographic footprint covers economically diverse markets with steady population and business growth, providing a stable foundation for loan demand and deposit gathering. Management has consistently demonstrated disciplined expense management while investing in technology infrastructure to compete effectively with larger national banks and emerging fintech competitors. Fifth Third presents compelling value at current levels, trading at a significant discount despite maintaining solid operational metrics and capital strength. The bank's conservative approach to credit risk has positioned it well to withstand potential economic uncertainty, while rising interest rates are expected to benefit its net interest margins over time. Recent quarters have shown steady loan growth and improving efficiency ratios, indicating that management's operational execution remains strong. The 3.89% dividend yield appears well-covered by earnings, with management maintaining a conservative payout ratio that provides flexibility during challenging periods. Regional banks like Fifth Third often outperform during economic recovery phases, and the current 22.5% discount from recent highs creates an attractive entry point for investors seeking exposure to well-managed financial institutions with strong local market positions and proven management teams. Mondelez International operates as a leading global snacking company, owning iconic brands including Oreo, Cadbury, Toblerone, and Trident across the chocolate, biscuits, gum, and candy categories. The company maintains strong market positions in key geographic regions, with particular strength in emerging markets where rising disposable incomes drive consistent demand growth. Recent strategic initiatives focus on expanding premium product offerings and enhancing direct-to-consumer capabilities. The business benefits from recurring revenue characteristics as consumers regularly repurchase favorite snack brands, creating predictable cash flows that support consistent dividend payments and growth investments. Mondelez has demonstrated pricing power during inflationary periods while maintaining market share through effective brand management and innovation programs that resonate with evolving consumer preferences. Mondelez offers attractive defensive characteristics combined with growth potential in emerging markets where the company maintains leading positions. The stock's recent weakness appears overdone given the company's strong brand portfolio and consistent execution on margin improvement initiatives. Management has successfully navigated supply chain challenges while implementing strategic pricing actions that protect profitability. The consumer staples sector provides stability during uncertain economic periods, while Mondelez's global diversification reduces dependence on any single market. The 2.82% dividend yield, combined with the company's history of consistent dividend growth, appeals to income-focused investors. With shares trading 12.2% below recent highs despite posting positive year-to-date returns of 12.38%, the current valuation presents an opportunity to acquire a quality consumer products company at a reasonable price. General Dynamics operates as a premier aerospace and defense contractor, serving government and commercial customers through four main business segments: Aerospace, Combat Systems, Marine Systems, and Technologies. The company builds Gulfstream business jets, Virginia-class submarines, Abrams tanks, and various mission-critical technologies for defense applications. Recent contract wins and robust order backlogs provide revenue visibility extending several years into the future. The defense contractor benefits from stable, long-term government contracts while the Gulfstream division serves affluent individuals and corporations seeking premium business aviation solutions. This diversification provides balance between government and commercial revenue streams, while the company's reputation for engineering excellence and program execution has earned it preferred contractor status across multiple defense platforms. General Dynamics trades at an attractive valuation, despite holding a strong competitive position in defense markets that are experiencing increased spending globally. Recent geopolitical tensions have highlighted the importance of defense capabilities, while growing international demand for proven American military systems creates additional growth opportunities. The company's submarine construction programs alone provide decades of contracted revenue streams. The Gulfstream business continues recovering from pandemic-related weakness, with order activity showing improvement as corporate travel normalizes and wealthy individuals invest in private aviation. Management maintains a conservative approach to capital allocation while consistently returning cash to shareholders through dividends and share repurchases. The 2.18% dividend yield, combined with the stock's 13.2% discount from recent peaks, creates an attractive entry point for investors seeking exposure to both defense spending trends and luxury aviation recovery. Honeywell International operates as a diversified technology and manufacturing company serving aerospace, building technologies, performance materials, and safety solutions markets. The company's portfolio encompasses aircraft engines, automation systems, specialty chemicals, and safety equipment utilized across various industrial, commercial, and residential applications. Recent strategic focus emphasizes software-enabled solutions and sustainable technologies that address climate and energy transition challenges. The company benefits from multiple long-term secular trends, including aircraft fleet modernization, the adoption of building automation, and industrial digitization initiatives. Honeywell's engineering capabilities and established customer relationships provide competitive advantages in developing next-generation solutions for evolving market needs. In contrast, its diversified end markets reduce dependence on any single industry cycle. Honeywell represents quality industrial exposure at a reasonable valuation, with shares trading only 7.3% below recent highs despite delivering the strong year-over-year performance of 16.07%. The company's transformation toward higher-margin, software-enabled businesses has improved profitability metrics while reducing cyclical exposure. Recent aerospace recovery trends benefit multiple Honeywell divisions as air travel continues normalizing globally. The building technologies segment positions Honeywell to benefit from increased focus on energy efficiency and innovative building solutions. At the same time, performance materials serve the growing demand for specialty chemicals and advanced materials. Management's consistent execution of operational improvement initiatives, combined with disciplined capital allocation and a 2.01% dividend yield, makes Honeywell an attractive investment for investors seeking exposure to industrial innovation themes at a reasonable entry point. Bottom Line These five undervalued stocks represent quality companies trading at discounts to recent highs while maintaining strong fundamentals and clear growth catalysts. Each selection offers different sector exposure—energy, banking, consumer staples, defense, and diversified industrials—providing portfolio diversification benefits. The combination of attractive dividend yields, proven management teams, and compelling valuations creates opportunities for both income and capital appreciation as market sentiment eventually recognizes their underlying value propositions.
