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3 Ways to Earn as Much as 135% in 2020 (While Keeping the CRA Away)

Brian Pacampara, CFA
Profit dial turned up to maximum

Hi there, Fools. I’m back to quickly highlight three stocks trading at new 52-week highs. Why? Because after a given stock rallies over a short period of time, one of two things usually happens:

  • the stock keeps on climbing as momentum traders pile on; or
  • the stock quickly pulls back as value-oriented investors lock in profits.

The three stocks below have returned as much as 135% over the past year. So, if you’re looking to carry that kind of momentum into 2020 with your TFSA, this list might be a good place to begin.

Natural selection

Leading off our list is natural gas Goliath Enbridge (TSX:ENB)(NYSE:ENB), whose shares are up 21% over the past year and are trading near 52-week highs of about $52 per share.

Enbridge’s price appreciation should continue to be supported by sound fundamentals in 2020. Earlier this week, the stock popped after management said it expects 2020 distributable cash flow per share of $4.50-$4.80 versus its 2019 forecast of $4.30-$4.60.

More importantly, Enbridge boosted the quarterly dividend by nearly 10% to $0.81.

“We are pleased to be providing our shareholders with another strong dividend increase for 2020,” said CEO Al Monaco, “which reflects the strength of our business, our confidence in the future and our ability to meet the needs of our customers.”

Enbridge shares currently offer a fat dividend yield of 6.3%.

Golden opportunity

Next up, we have gold miner Wesdome Gold Mines (TSX:WDO), which has rocketed 135% over the past year and currently trades near 52-week highs of $9.48 per share.

In addition to the obvious strength in the price of gold, Wesdome’s big gains in 2019 have been fueled by solid production and earnings growth. In the most recent quarter, income jumped to $12.4 million, as production increased 46% to 28,910 ounces.

More importantly, Wesdome’s cash position remains healthy.

“Despite our higher sustaining, project, and exploration expenditures during the quarter, the company was able to generate $9.2 million in free cash flow, thereby resulting in a cash position at the end of the quarter of $38.6 million,” said CEO Duncan Middlemiss.

Wesdome trades at a forward P/E of 27.

Power play

Rounding out our list is green energy company Northland Power (TSX:NPI), whose shares are up more than 20% over the past year and trade near 52-week highs of $28.13 per share.

Northland’s solid gains continue to be supported by impressive scale (economic interests in 2,429 MW generating capacity), strong secular trends, and steady cash flows. In the most recent quarter, gross profits increased 11% as sales improved 8% to $378 million.

More importantly, Northland’s cash flow continues to grow at a double-digit clip.

“Northland continued to deliver healthy, sustainable results in the quarter with a 14% increase in adjusted EBITDA and free cash flow per share over last year,” said CEO Mike Crawley. “Most significantly, we acquired EBSA, a high-quality regulated Colombian utility.”

Northland currently yields a solid 4.3%.

The bottom line

There you have it, Fools: three red-hot momentum stocks worth checking out.

As always, they aren’t formal recommendations. Instead, look at them as a starting point for further research. Momentum stocks are especially fickle, so plenty of your own due diligence is required.

Fool on.

More reading

Fool contributor owns no position in any of the companies mentioned. The Motley Fool owns shares of and recommends Enbridge.

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