3 Stocks I Plan On Buying In 2021 At Current Prices
This market continues to just amaze me. Throw a dart put some money into that growth stock and watch the profits. It really seems that simple these days. I got a buddy who has been doing basically that and it’s been working great for him. He’s even getting lucky with penny stocks.
Some people probably feel like the next Warren Buffett these days. Look at his portfolio, who would want to own that? There’s no growth, you can see people say on twitter. Musk mentions a stock or bitcoin on twitter and things fly, or to the moon some would say. haha
Right now it seems like you shouldn’t even be in traditional blue chip stocks, no one wants those. Get some game stop or amc and hodl.. (I hate seeing hodl, it so dumb – its spelt hold.)
I guess I’m old school but most of our portfolio is built on quality blue chip stocks. While the market continues to go green and some of the value quality blue chips have jumped in price there is still a couple bargains to be found. These are the 3 stocks I plan of buying more of in 2021 at their current prices.
Lockheed Martin – LMT
With tax time near and being able to file them as early as Feb 22nd, this will most likely be our buy for the month.
As usual I plan on figuring out how much taxes we will get get back and use a line of credit to invest more into our rrsp before the 2020 deadline. (March 1st 2021) Playing with numbers until they basically break even from the total tax return and amount we owe to line of credit. This is a great play to get more money working for you faster, but you need to be disciplined to pay that loan back as soon as you get that tax refund! If your interested in reading more about this approach you can read what we did a couple years ago here.
Lockheed Martin would be a new position for us, but I think its safe to say this stock is a great buy at the moment. They are a wide moat stock operating in a industry I don’t see changing for a very long time. LMT has a massive backlog of projects and while there are beliefs that the democrats will cut military spending I just don’t see it.
Wars while Trump was in office were basically non-existent and now we see tension with Taiwan and China. It sounds bad but I really think in the next 5 years we will see more missile’s being fired than the past 5 years. If I’m wrong – Great I would rather see no wars. Country’s will still be spending lots of money on defence.
I’ll be buying this stock because its a wide moat stock that isn’t going anywhere and is cheap at the moment. Based on yahoo finance we can see 7 analysts rank it a strong buy and the price is basically at the bottom of the analysts price targets. The stock price will gain 21.10% to get to the average analyst price target at current prices or 32.5% to get to the top of the range. Not much downside, lots of upside.
What about that dividend?
At current prices the starting yield is a solid 3.05% while they have a 5 yr avg yield of 2.54% and their payout ratio is 40%. All great numbers and with a starting yield quite a bit higher than their 5 year avg this implies they could be undervalued.
They have raised their dividend consistently for 18 years and sport a 5 year dividend growth rate of 9.8%. Very nice!
TC Energy – Trp.to
But Rob, why tc energy? They just cancelled the keystone pipeline..
That should show you how valuable existing pipelines are! Companies that have these pipelines in place are great investments. While everyone and their grandmothers think green energy is coming overnight. Its not. Demand for oil may go down in the future but natural gas will only pickup in my opinion. Nuclear power as well. We are going to need even more energy from power plants to power all these electric cars.
Tc energy checks off all these boxes. They have lots of existing pipelines, both oil and natural gas. They are increasing their renewable energy exposure, own or partially own 10 power plants (Nuclear & Natural Gas) and have 118 billion cubic feet of natural gas storage facility’s. I think they will be fine without keystone.
If anything the keystone news just offered us a great price to get some more shares!
Out of 15 analysts 13 of them recommend to buy or strong buy.. The current price is actually under the low range of their targets.. You got a 12.72% gain just to get to the low end of the range. 24.67% gain to get the average price and finally a 38.18% gain to get to the top of that range.
We know the oil and gas sector is beaten up but wow those numbers look good. They also have a very healthy dividend too.
Currently Tc Energy has a starting yield of 5.95% and will likely raise that dividend next week with earnings. Their 5 year avg yield is 4.46% so again that gives an idea that they could be undervalued. Tc Energy has a 20 year dividend growth streak with a great 9.3% 5 year dividend growth rate.
So you got a massive starting yield, great dividend history and a stock who’s price is actually under the analysts low end target price. It actually sounds to good to be true. I guess you got to ask yourself do you think oil and gas is dead? If not this is a bargain.
Algonquin Power & Utilities – AQN.TO
One thing we all know about the next 10 years – renewable’s will be massive. Every country wants to have more clean energy moving forward. This industry has all the tailwinds on its side. The problem is a lot of the green energy plays have ran up to overbought territory in my opinion.
As we can see above Algonquin is no different, but it has been very generous with its dividend growth and has a lot of projects in construction. You also get a 3.53% starting yield which is pretty nice considering how much the stock has ran up and compared to other renewable energy companies.
Now it should be noted Algonquin isn’t a pure green energy play. They also are in the natural gas, water distribution and the wastewater business. Great diversification in areas that will only be in more demand in the future.
The stock is not a steal at the moment like the other 2 above, but its in a industry you definitely want to be in for the future. You can see the price is actually higher than what analysts predict it should be and the yield is lower than their 5 year average of 4.33%.
They have a 10 year dividend growth streak and a 5 yr average dividend growth rate of 10%. Algonquin power also offers a 5% drip discount, which is incredible if you like to drip your stocks like I do.
This stock has been one of our best performers and while it may not be the cheapest today I think in 5-10 years I’ll be glad we just continued to add to our position as they continue their impressive growth. Algonquin tends to issue more stock once in awhile when it finds a great acquisition or for future projects. That has been a great time to buy them on the dip in our experience, keep an eye out for times like that.
Well there you have it 3 Stocks I Plan On Buying In 2021 At Current Prices. Tc Energy and Lockheed Martin are definitely on the top of the list, but Id love to get more Algonquin sometime in 2021 and I really wouldn’t mind paying current prices for it.
While the market keeps chugging there are still some values out there. Is there any stocks that you are really planning on adding at current prices?
Hey I’m Rob, creator of Passive Canadian Income.
In 2011 me and my wife had almost $60,000 in debt and a negative $7,000 Net Worth. Through hard work and financial education we paid all that off. Now we are focusing on increasing our Passive Income Streams to make the money work for us. Feel Free to Follow along the Journey by clicking the Social Media links below or subscribing to get notified of new posts on the sidebar.