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Yahoo
27-05-2025
- Business
- Yahoo
The Smartest Commodity Stock to Buy With $1,400 Right Now
Written by Andrew Button at The Motley Fool Canada Are you looking for commodity stocks to invest a small sum – perhaps $1,400 – in? If so, the Toronto Stock Exchange (TSX) provides you with plenty of options to work with. Canada's economy is heavily resource based, having plenty of metals, oil, gas, and lumber companies. The biggest of them are usually publicly traded. The world consumes increasing amounts of resources with each passing year, and Canada has far more than it needs for its own purposes. So, TSX commodity stocks collectively have promise. In this article, I will explore one TSX commodity stock that is worth a buy today. Suncor Energy Inc (TSX:SU) is a Canadian energy company that is primarily involved in extracting, selling and refining crude oil. The diversified energy firm sells its own refined products at a network of gas stations called Petro-Canada. It is one of the biggest and most entrenched Canadian energy companies. When it comes to commodities, oil and gas are among the most reliable out there. With countless industry use cases (e.g., fuel, chemicals, asphalt etc.), oil has a steady source of demand outside of speculative activity. This makes it a generally more predictable market than that for other commodities whose speculative use cases make up a greater percentage of trading volume. There is some concern about oil someday becoming irrelevant and obsolete. These concerns are overblown for three reasons: The energy sources that will supposedly replace oil, such as nuclear and renewables, take a very long time to build out. This effectively removes such alternatives as a 'medium term' threat–though they'll likely negative impact demand over the very long term. Oil will probably always have some role as a backup fuel source (e.g., in generators) because renewables generally don't work unless the user has access to a working electric grid. Oil is the best known starting material for chemicals production and thus indispensable to industries like plastics and pharmaceuticals. While we will likely see some of oil's energy use replaced over the very long term, the commodity will probably always be used to some extent or another. This fact bodes well for Suncor's future prospects. In addition to selling a very valuable and indispensable commodity, Suncor operates other diversified business lines. These include refining, natural gas marketing, and gas stations. So, Suncor has some ability to remain profitable even in moderately weak oil markets. Suncor's profitability can be seen in its margins. In the trailing 12-month (TTM) period, it had a 59% gross margin, an 18% EBIT (operating income) margin, a 12% net margin, and a 16% free cash flow (FCF) margin. These are fairly high margins, suggesting that Suncor is a solidly profitable enterprise. Last but not least, Suncor Energy boasts a very cheap valuation. At today's prices, it trades at 9.4 times earnings, 1.3 times sales, and 1.4 times book. These multiples are low in the absolute sense, and also lower than those of the broader TSX. So, SU stock looks like a good value. The post The Smartest Commodity Stock to Buy With $1,400 Right Now appeared first on The Motley Fool Canada. Before you buy stock in Suncor Energy, 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 Suncor Energy 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 $21,345.77!* 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 24 percentage points since 2013*. See the Top Stocks * Returns as of 4/21/25 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 Andrew Button has positions in Suncor Energy. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. 2025
Yahoo
24-05-2025
- Business
- Yahoo
The TSX at All-Time Highs: How I Saw This Outperformance Coming
Written by Andrew Button at The Motley Fool Canada The Toronto Stock Exchange (TSX) set a new all-time high last Tuesday. Closing at 26,029 points, it was slightly up from Friday's close, which itself was headline-grabbing. The TSX's all-time high might have grabbed headlines because the milestone contrasts sharply with the performance of the U.S. indexes this year: the NASDAQ is down and the S&P 500 is roughly flat. In light of the weak U.S. performance, Canada's all-time high was unusual to see. I don't mean to brag, but I saw all this coming. In early 2024, I wrote several articles that said Canadian equities looked more attractive than U.S. equities because of their cheaper valuations and less risk stemming from Trump tariffs. One example of such an article was 'S&P 500 at All-Time Highs: Why Canadians Should Shop Local Instead.' The TSX Index has outperformed the S&P 500 since that article was published. Now that I'm done patting myself on the back, I should turn to the more important matter: what to do now. Seeing Canada outperform the U.S. this year might bring a little shot of patriotic pride, but it's not necessarily a reason to continue holding TSX stocks this year: home-field bias is a major drag on investors' returns. In this article, I will explore what you can do with your money now that the TSX is at an all-time high. Before exploring some investments that could work despite the TSX's rapidly steepening valuation, I should explain how the TSX got here. The most literally correct explanation for the TSX's recent all-time high is that investors bought more TSX stocks than they sold this year. This is somewhat obvious, though. What we really want to know is why investors bought so much TSX equity this year. One possible reason could be that they pulled money out of the U.S. and decided to invest it elsewhere. Donald Trump's April 2 tariff announcement stoked fear in investors worldwide. U.S. markets plunged; global markets fell to a lesser extent. The investors selling U.S. stocks then wanted out of a market perceived as risky. However, they may have wanted to stay invested in equities, in which case Canadian markets would have offered what they needed. A second possible reason is that investors saw value in Canadian markets. At the start of this year, the TSX was relatively modestly valued, trading at about 20 times earnings. The S&P 500 was closer to 30 times. Seeing this, investors may have decided to up their allocation to TSX stocks. Having shared how we got here, it's time to explore where to find value in TSX stocks today. In general, Canadian energy stocks are pretty modestly valued. They got that way because oil prices crashed this year, but crude prices are already starting to recover from their April beatdown. Let's take Suncor Energy (TSX:SU) stock as a case in point. It trades at 9.3 times earnings, which is much cheaper than the TSX Index as a whole. Despite the cheapness, the company is ultra-profitable, with a 16% free cash flow margin and a 14% return on equity. The company does tend to make less money when oil prices are low; however, it has refining and gas station businesses that aren't as oil price-sensitive as its crude operations. Lastly, the company is a decent dividend play with a roughly 4.6% yield. So, Suncor stock has things going for it right now. It's the same story with many other TSX energy stocks, which are dirt cheap compared to the broader market. The post The TSX at All-Time Highs: How I Saw This Outperformance Coming appeared first on The Motley Fool Canada. Before you buy stock in Suncor Energy, 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 Suncor Energy 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 $21,345.77!* 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 24 percentage points since 2013*. See the Top Stocks * Returns as of 4/21/25 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 Andrew Button has no positions in the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. 2025 Sign in to access your portfolio
Yahoo
31-03-2025
- Business
- Yahoo
These 3 TSX Stocks Are Totally Shielded From Trump Tariffs
Written by Andrew Button at The Motley Fool Canada Are you looking for tariff-resistant TSX stocks that can withstand Trump's trade war? If so, you might want to look into real estate investment trusts (REITs), utilities, and consumer staples. REITs and utilities have very domestic-oriented operations that aren't hit by tariffs, and consumer staples like grocery stores can actually gain from tariffs by offering Canadian products to those trying to buy locally. In this article, I will explore three TSX stocks that are totally shielded from Trump tariffs. Loblaw (TSX:L) is a tariff-resistant Canadian grocer that operates a nationwide grocery chain. The company has pursued a localization strategy that has resulted in it operating under different names in different provinces (e.g., Superstore, Loblaw, Dominion, etc.), but essentially, it's all one chain. Now, if you're familiar with Loblaw stores, you might be scratching your head right now. 'Don't those stores have all kinds of American brands in them?' Yes, they do, but keep two things in mind: An American brand does not mean American-made. Many American food and beverage products are made locally in Canada. A good example of this is Pepsi drinks, which are bottled in Canada. Loblaw has an extensive line of store-brand President's Choice products that are 100% Canadian-made. The company has been labelling its products as Canadian when applicable, a wise marketing decision that may drive increased sales and customer loyalty if Trump doesn't back off. Killam Apartment REIT (TSX: is a Canadian REIT that operates exclusively in Canada. It operates primarily in East Coast markets like Newfoundland, Nova Scotia, and Ontario. As a residential REIT, its rents are not too subject to tariff-sensitive tenants such as manufacturers and (some) retailers. Instead, it makes money primarily off of Canadian residents' incomes, only a small portion of which are impacted by tariffs. The company delivered modest growth in revenues, as well as high growth earnings and cash flows, in the trailing 12-month (TTM) period. It is also highly profitable, boasting a 60% operating income margin and a 5.6% adjusted funds from operations (AFFO) yield. It could be worth a look. Last but not least, we have Fortis (TSX:FTS). Fortis is a Canadian utility company that operates in Canada, the U.S., and the Caribbean. The company is best known for its long dividend-growth streak, having raised its dividend for 51 consecutive years. Fortis does have U.S. operations, but they don't necessarily run on exported power. Fortis is primarily a distributor of power, not a producer (it does own some hydro plants). The energy mix in Fortis's U.S. business is tariff-resistant, as it operates utilities in Arizona and New York. Canadian energy companies sell energy to these states, but both have a mix of local and Canadian suppliers, with utilities free to bid on the energy they choose. As for Fortis's Canadian and Latin American operations, those aren't impacted by Trump tariffs in any way. So, Fortis is pretty tariff-resistant. When Trump's tariffs were first announced, they sent Canadians into a panic. It looked like they were going to crash our economy! But now, with many being walked back, tariffs seem like less of a threat. If you're still concerned about their investment implications, you could consider an investment in one of the stocks above. The post These 3 TSX Stocks Are Totally Shielded From Trump Tariffs appeared first on The Motley Fool Canada. Motley Fool Canada's market-beating team has just released a brand-new FREE report revealing 5 "dirt cheap" stocks that you can buy today for under $50 a share. Our team thinks these 5 stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune. Don't miss out! Simply click the link below to grab your free copy and discover all 5 of these stocks now. Claim your FREE 5-stock report now! More reading Best Canadian Stocks to Buy in 2025 Here's Exactly How $15,000 in a TFSA Could Grow Into $200,000 4 Secrets of TFSA Millionaires 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 Andrew Button has no positions in any of the stocks mentioned. The Motley Fool recommends Fortis. The Motley Fool has a disclosure policy. 2025 Sign in to access your portfolio
Yahoo
15-03-2025
- Business
- Yahoo
Claiming a Home Office on Your 2024 Tax Return? Read This First
Written by Andrew Button at The Motley Fool Canada Are you a self-employed Canadian looking for tax breaks to claim on your 2024 tax return? If you're like many self-employed Canadians, you've probably thought about claiming a room in your home (or even several of them) as office space. Home office tax deductions can save you quite a bit of money, because the amount claimed can often be quite substantial. If you have a home that costs you $2,500 a month all-in (mortgage interest + utilities + cable/internet) and one-fifth of the home is office space, that's $500 per month you can claim on your taxes. This works out to $6,000 per year, and a tax savings of $2,000 if you have a 33% marginal tax rate. So the home office deduction can be very lucrative. However, it's also risky. Home office expenses are among those that CRA auditors tend to look at with suspicion, because they are very frequently abused. In this article, I will explore the risks of claiming home office expenses on your 2024 tax return. Home office deductions often get denied by CRA auditors, the reason being many self-employed people claim them willy nilly, when the actual criteria for claiming them are quite stringent. To legitimately claim a home office, you need to use it as your primary and exclusive workplace. If you only spend 10% of your working hours in your home office, or if your home office doubles as a laundry room, you can't claim it. If you claim home office deductions on your tax return, then get audited, you risk having the expenses denied. If this happens, then you'll have to pay back whatever 'tax savings' you realized by claiming the home office. Let's imagine that you have a 33% marginal tax rate and claim a $6,000 home office tax deduction for 2024, yielding a $2,000 tax refund. Receiving that $2,000 cheque will feel nice, sure, but if you get audited and have the expense denied, you'll have to pay the $2,000 back to the CRA. So, don't get adventurous with home office deductions. While we're on the topic of real estate, there is a type of real estate investment that is eligible for a generous tax break: Real estate investment trusts (REITs). These are eligible for the dividend tax credit, which can save you quite a bit of money. Let's use Killam Apartment REIT (TSX: as an example. KMP is a REIT that pays a $0.06 monthly (or $0.72 annual) dividend. So at today's unit price of $16.66, KMP yields 4.3%. Any dividends you receive from this REIT are eligible for the dividend tax credit. If you invest $100,000 into you get about $4,300 per year in dividend income. Here's the math on that: COMPANY RECENT PRICE NUMBER OF SHARES DIVIDEND TOTAL PAYOUT FREQUENCY Killam Apartment REIT $16.66 6,002 $0.06 per month ($0.72 per year) $360 per month ($4,321 per year) Monthly Now, if you have a 33% marginal tax rate, you pay roughly $1,440 in taxes on $4,321 worth of employment income. But with dividend income, you may have much less due to the dividend tax credit. Here's how the credit is calculated: First, your $4,321 in dividend income is grossed up to $5,963. Your taxes on the grossed-up amount (pre-credit) are $1,987. The 15% Federal credit is $894. A 10% provincial credit is $596. Actual taxes owing = $497. So, thanks to the dividend tax credit, you pay about $1,000 less than you otherwise would. Sweet! The post Claiming a Home Office on Your 2024 Tax Return? Read This First appeared first on The Motley Fool Canada. Before you buy stock in Killam Apartment Reit, 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 Killam Apartment Reit 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 $21,058.57!* 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 38 percentage points since 2013*. See the Top Stocks * Returns as of 2/20/25 More reading Best Canadian Stocks to Buy in 2025 Here's Exactly How $15,000 in a TFSA Could Grow Into $200,000 4 Secrets of TFSA Millionaires 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 Andrew Button 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. 2025 Sign in to access your portfolio
Yahoo
08-03-2025
- Business
- Yahoo
Air Canada: Buy, Sell, or Hold in 2025
Written by Andrew Button at The Motley Fool Canada Air Canada (TSX:AC) stock took a beating this week as Donald Trump finally implemented a long-threatened slate of tariffs on Canada. The tariffs did not last long before Trump took another one-month pause, but they were enough to spook markets, which collapsed on Thursday. Air Canada got hit particularly hard that day, falling 3.6% in price – more than the broader markets. So, Air Canada had a rough day. The question is: What's the long-term outlook? Stocks have bad days here and there, but that doesn't make them un-investable. To the contrary, if they are quality companies, then down days are good opportunities to buy them. In this article, I explore Air Canada stock in detail, arguing that its recent performance belies its long-term strength. One thing that Air Canada has going for it is a strong competitive position. Canada's air travel sector is essentially a duopoly with two main players: AC and WestJet. There are technically some smaller airlines like Porter and PAL Airlines, but they are smaller than AC and WestJet, and largely regional players. A duopoly market structure allows for a healthy amount of profit for the two main players. That's exactly what we're seeing with Air Canada, which had a 7% net margin in the trailing 12-month period. Profitability took a bit of a hit last quarter due to rising expenses, but the long-term trajectory remained solid. Speaking of last quarter, let's look at the results. In the most recent quarter, Air Canada delivered: $5.4 billion in revenue, up 4% year over year. A $254 million operating loss, down from $79 million in positive operating profits. $696 million in adjusted earnings before interest, tax, depreciation and amortization (EBITDA), up $175 million. A $644 million net loss. $-495 million in free cash flow, down from $669 million. As you can see, the numbers weren't exactly all great. Revenue was strong, but the bottom line metrics were mostly negative or declining. This was due to rising expenses in various parts of Air Canada's business, most notably compensation and capital expenditures (the latter directly impacts free cash flow but not earnings). The company expects to become FCF positive again in 2028, running at about breakeven this year and in 2026. The biggest single source of complexity for Air Canada right now is its upcoming capital expenditures. The company plans to spend about $4 billion this year and $5 billion next year on airplanes and other assets. These assets have long useful lives, so the CAPEX will be money well spent. However, it also means that we have to sit through 2025 and 2026 with almost no free cash flow. It'll be a long journey, but the company expects to earn $1.5 billion per year in FCF by 2028. So, it could be worth it. The bottom line on Air Canada is that it will be a very profitable company once it is done with its airplane buying spree. The purchases will play out over several years during which FCF will be negative. But it will be worth it in the end. The post Air Canada: Buy, Sell, or Hold in 2025 appeared first on The Motley Fool Canada. Before you buy stock in Air Canada, 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 Air Canada 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 $21,058.57!* 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 38 percentage points since 2013*. See the Top Stocks * Returns as of 2/20/25 More reading 10 Stocks Every Canadian Should Own in 2024 [PREMIUM PICKS] It's Time to Buy: 1 Canadian Stock That Hasn't Been This Cheap in Years Where to Invest Your $7,000 TFSA Contribution 3 No-Brainer TSX Stocks to Buy With $300 5 Years From Now, You'll Probably Wish You Grabbed These Stocks Subscribe to Motley Fool Canada on YouTube Fool contributor Andrew Button owns shares in Air Canada. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. 2025 Sign in to access your portfolio
