Notably, stocks of companies that could see a strong rebound in demand after vaccine deployment are likely to generate robust growth and outperform broader markets in 2021.
Keep an eye out for this subprime lender
clumsy (TSX: GSY) has made tons of money for its investors. For those who don’t know, goeasy’s revenue and profits have grown at a tremendous rate over the past two decades, which has helped the company achieve a TSR (Total Return for Shareholders) of 7,452% since. 2001.
In particular, the increase in government subsidies and home orders temporarily weighed on its demand and impacted its turnover. However, with the easing of the foreclosure measures and the reopening of the economy, the subprime lender began to see improvement in demand with a rise in loan initiations.
With the expected recovery in the economy and the rollout of the vaccine, goeasy’s total loan amount could mark a significant improvement and lead to double-digit growth in its revenue and EPS. At the same time, its high payment volume and cost-cutting measures should dampen its profits and increase your stock in 2021.
goeasy is trading at a multiple of forward P / E of 11.6, and given its over 30% growth in bottom line, its stock is a good deal at current levels. Additionally, the company is likely to increase your returns through higher dividend payouts.
This airline stock could recover quickly
The rollout of the COVID-19 vaccine in 2021 could accelerate the pace of the recovery of passenger airlines. Given the improved operating environment, I see immense value Air Canada (TSX: AC).
Air Canada shares have been heavily bought off over the past month due to positive vaccine data, which has led to a rally in its stock. However, it is still down around 47% year-to-date and has a long growth track.
I believe the increase in passenger numbers could act as a powerful growth catalyst for Air Canada stocks in 2021 and help the company generate strong returns. The airline’s key performance indicators are expected to show a strong improvement in 2021, particularly in the second half of the year, and lead to a resumption of its action.
Don’t miss this energy giant
While many would prefer pipeline companies to play the recovery in the energy sector because they are relatively secure and generate strong dividends. I think pure nature energy companies will likely be the biggest beneficiaries of improved crude oil prices.
Suncor Energy (TSX: SU) (NYSE: SU), with its integrated business model and long-term assets, could deliver stellar returns with a recovery in demand in 2021. Rising economic activity around the world and the improved demand could help Suncor post strong growth in its finances and cushion its results. Also, like most energy stocks, Suncor trades low and is down about 44% year-to-date.
Given the expected improvement in energy demand and its low valuation, Suncor Energy stock looks attractive and could outperform broader markets in 2021.
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Fool contributor Sneha Nahata has no position in any of the stocks mentioned.