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2 TSX Stocks That Could Grow Your Portfolio Over the Next Decade

Money growing in soil , Business success concept.
Money growing in soil , Business success concept.

Written by Ambrose O'Callaghan at The Motley Fool Canada

The S&P/TSX Composite Index was up 180 points in early afternoon trading on September 12. Battery metals, energy, and base metals rounded out the best-performing sectors on the day at the time of this writing. Today, I want to zero in on two TSX stocks that have the potential to significantly grow your portfolio over the course of the 2020s. Ideally, these are equities that Canadian investors can set and forget. Let’s jump in.

Here’s a TSX stock that will rise with the green energy space

Capital Power (TSX:CPX) is an Edmonton-based company that develops, acquires, owns, and operates renewable and thermal power-generation facilities in Canada and the United States. Shares of this TSX stock have climbed 31% in 2022 at the time of this writing. That has pushed the stock into positive territory in the year-over-year period.

Canadian investors should be eager to get in on the renewable power space. Precedence research recently estimated that the global renewable energy market was valued at $952 billion in 2021. The market researcher expects this sector to deliver a compound annual growth rate (CAGR) of 8.6% from 2022 through to 2030.

This company released its second-quarter fiscal 2022 results on August 2. It delivered total revenues and other income of $1.21 billion — up from $941 million in the prior year. Meanwhile, it posted adjusted funds from operations (AFFO) of $380 million compared to $250 million in the first six months of fiscal 2021. AFFO per share rose to $3.27 over $2.31 for the same stretch in the prior year.

Shares of this TSX stock are trading in favourable value territory compared to its industry peers. Capital Power offers a quarterly dividend of $0.58 per share. That represents a solid 4.5% yield.

Don’t sleep on this TSX stock, as toy sales have remained resilient

Spin Master (TSX:TOY) is a Toronto-based children’s entertainment company that creates, designs, manufactures, licenses, and markets various toys, entertainment franchises, and digital games in North America and around the world. This TSX stock has slipped 1.3% so far in 2022. Its shares are still up 7.4% in the year-over-year period.

In the second quarter of 2022, the company reported total revenue of $506 million — up 29% from the previous year. Meanwhile, adjusted operating income rose to $97.6 million compared to $57.7 million in the second quarter of fiscal 2021. Investors interested in a clearer picture of Spin Master’s profitability may want to look to its EBITDA, which stands for earnings before interest, taxes, depreciation, and amortization. The company’s adjusted EBITDA increased to $113 million compared to $81.8 million in the previous year.

Revenue in the first six months of fiscal 2022 rose 31% to $930 million. Moreover, adjusted EBITDA climbed to $209 million over $118 million in the year-to-date period in 2021. Shares of this TSX stock last possessed an attractive price-to-earnings ratio of 12. Spin Master offers a quarterly dividend of $0.06 per share, which represents a modest 0.5% yield.

The post 2 TSX Stocks That Could Grow Your Portfolio Over the Next Decade appeared first on The Motley Fool Canada.

Should You Invest $1,000 In Capital Power?

Before you consider Capital Power, you'll want to hear this.

Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in August 2022 ... and Capital Power wasn't on the list.

The online investing service they've run for nearly a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 27 percentage points. And right now, they think there are 5 stocks that are better buys.

See the 5 Stocks * Returns as of 8/8/22

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Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Spin Master Corp.

2022