Yahoo Finance Ready to Invest With $2,000? 2 Stocks for April 2024
Written by Aditya Raghunath at The Motley Fool Canada
The ongoing market volatility offers you the opportunity to buy quality stocks at a discount and benefit from outsized gains when market sentiment improves. Here are two quality undervalued TSX stocks you can consider buying in April 2024.
Spin Master stock
Valued at $3.2 billion by market cap, Spin Master (TSX:TOY) stock is down 47% from all-time highs. Spin Master is among the largest children’s entertainment companies in the world with three business segments that include Toys, Entertainment, and Digital Games.
With distribution in more than 100 countries, Spin Master is known for its global portfolio of brands, including PAW Patrol, Air Hogs, and GUND.
Its entertainment division creates and produces multi-platform content through an in-house studio and in partnership with other creators. Moreover, it has established a presence in online gaming by offering open-ended and creative games and educational play across digital environments.
In 2023, Spin Master reported revenue of $1.9 billion and generated a record $419 million in adjusted EBITDA (earnings before interest, tax, depreciation, and amortization), indicating a margin of 22%.
Spin Master reported an operating margin of $227 million and a free cash flow of $123 million in 2023, which meant it spent over $100 million in capital expenditures. In the last four quarters, Spin Master also acquired certain assets from 4D Brands for $18.9 million and purchased the HEXBUG brands of toys for $14.6 million.
Spin Master pays shareholders an annual dividend of $0.24 per share, which translates to a forward yield of 0.77%. The toy company paid shareholders total dividends of $18.4 million last year, which suggests it has a payout ratio of less than 15%.
Priced at 10 times forward earnings, Spin Master stock is quite cheap, given its forecast to increase earnings by roughly 9% annually in the next two years. Analysts remain bullish and expect the TSX stock to surge by 50% in the next 12 months.
Parkland stock
Valued at $7.5 billion by market cap, Parkland (TSX:PKI) is an international fuel distributor and convenience retailer with operations in 26 countries. Its commercial operations provide businesses with industrial fuels, including renewable fuel sourcing, while its retail business serves more than one million customers each day. With 4,000 retail and commercial locations in North America, Parkland has developed supply, distribution, and trading capabilities over time.
Parkland pays shareholders an annual dividend of $1.40 per share, indicating a forward yield of 3.3%, which is quite tasty.
Despite an uncertain macro environment in 2023, Parkland increased adjusted EBITDA by 18% to $1.9 billion and operating cash flow by 34% to $1.78 billion. A widening earnings base allowed Parkland to repay debt amid rising interest rates, thereby strengthening its balance sheet.
In 2023, Parkland repaid $747 million of its credit facility, lowering its leverage ratio to 2.8 times from 3.4 times in the year-ago period. The company also raised dividends by 3% year over year, marking its 12th consecutive year of dividend hikes.
Priced at 13.6 times forward earnings, PKI stock is forecast to expand earnings by 20% in the next 12 months. Analysts expect the TSX dividend stock to surge by almost 30% in the next 12 months.
The post Ready to Invest With $2,000? 2 Stocks for April 2024 appeared first on The Motley Fool Canada.
Should you invest $1,000 in Parkland Fuel Corporation right now?
Before you buy stock in Parkland Fuel Corporation, consider this:
The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Parkland Fuel Corporation wasn’t one of them. The 10 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 $15,578.55!*
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 32 percentage points since 2013*.
See the 10 stocks * Returns as of 3/20/24
More reading
Can You Guess the 10 Most Popular Canadian Stocks? (If You Own Them, You Might Be Losing Out.)
How to Build a Bulletproof Monthly Passive-Income Portfolio in 2024 With Just $25,000
Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool recommends Spin Master. The Motley Fool has a disclosure policy.
2024
