From oil and gas to vegetable farming and memorial services, there’s an interesting mix of industries on display in today’s round-up of high-growth stocks. Below you’ll find a breakdown of the data for three stocks on the TSX index that could come out of 2019 with a high expected growth in earnings.
Village Farms International (TSX:VFF)(NASDAQ:VFF) A sturdy food stock worthy of a consumer cyclical portfolio in need of some defensive properties, Village Farms International is a potential capital gains play. Up 9.01% in the last 24 hours at the time of writing, this stock is popping, with a share price that’s been trending steadily upwards since the end of 2018.
Though there are a few warnings signs, such as negative one- and five-year average past earnings-growth rates, an above-threshold comparative debt level of 52.5% of net worth, and a high P/B ratio of 6.1 times book, growth investors should take note of a 114.8% expected annual growth in earnings, which is significantly high for a Canadian stock.
Park Lawn (TSX:PLC) With a focus on funerary and disposal services, this top Canadian stock is a strong contender for a portfolio geared towards a potential recession. Indeed, investors getting into a state of readiness for a 2019 downturn have more than a few reasons to stack shares in Park Lawn from decent per-asset valuation to steady growth.
As sturdy an all-rounder as one is likely to find on the TSX index, Park Lawn has a positive track record (see a one-year past earnings growth of 8.1% and five-year average growth of 20.6%), a healthy balance sheet (indicated by debt of 16.5% of net worth), and market-weight valuation in assets (a P/B of 1.5 times book). Some passive income is on the table, with a dividend yield of 1.81%, while growth investors should be hooked with a 49.5% expected annual growth in earnings.
Parkland Fuel (TSX:PKI) From Park Lawn to Parkland Fuel, investors looking to get defensive with potentially overlooked stocks have some good options at the moment. Up 6.71% in the last five days at the time of writing, and with an upward trend in its share price since the end of last year, Parkland Fuel had a decent 2018, with a one-year past earnings-growth rate of 150.3% beating its already positive five-year average of 20.9%.
Some might say that Parkland Fuel is a little overvalued at the moment, and judging from a P/E of 25.7 times earnings and P/B of three times book, this may well be the case. However, a moderate dividend yield of 2.93% matched with a 27.5% expected annual growth in earnings may qualify this stock for a long-term investment or inclusion in a TFSA or RRSP.
The bottom line Investors may want to resurrect their interest in Park Lawn — a stock that could potentially breathe some life into a moribund dividend portfolio. However, its P/E of 69.5 times earnings is a little on the high side. Would-be Parkland Fuel with a low appetite for risk may want to be aware of a debt level of 125.7% of net worth; meanwhile, high-growth investors have an intriguing stock in Village Farms International.
Fool contributor Victoria Hetherington has no position in any of the stocks mentioned. The Motley Fool owns shares of Village Farms International, Inc.
The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool Canada’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Motley Fool Canada 2019