Business & Investment

Top 2 rebound stocks in 2021

2020 was a difficult year for some stocks. Retail, leisure, travel and entertainment were all severely punished by pandemics and blockades. But now there is light at the end of the tunnel.

The· Vaccination drive in progress, And 2.3% of Canada’s population has already received the first dose of the COVID-19 vaccine. By the end of 2021, malls, flights and restaurants may return to normal.

With that in mind, here are the top two rebound stocks we could bet on this year as the recovery gained momentum.

Air Canada

Air Canada (TSX: AC) Equities were hit hard in 2020 as the sector felt it had been fully struck by the pandemic. Air Canada’s share price was also generous, but it has revived in recent weeks, with talk of being ready for a parabolic move.

Improvement of fundamentals

The earlier-than-expected pandemic and the subsequent resurgence of the travel industry are some of the factors that support why Air Canada is a perfect bet in the aviation industry. When travel restrictions are lifted, airlines could significantly increase the volume from this pandemic.

The breakthrough at the forefront of vaccines has once again brought hope to the confused aviation industry. As more people are vaccinated, pandemics should be curtailed, and their progress may lead to relaxation of blockade restrictions and fear of air travel. Similarly, Air Canada continues to establish itself as one of the beneficiaries.

Air Canada Stock Valuation

After a recent fall, Air Canada is now trading at significant discounts compared to its long-term outlook. Similarly, as the outlook for the travel industry improves, stock prices can skyrocket.

During the pandemic, the company’s freight revenues are growing steadily and could maintain their momentum in 2021. Airlines are already doubling their cargo space and operating more cargo flights to meet growing demand.

Air Canada boasts top-notch growth potential, backed by a solid balance sheet that has improved in the drive for ambitious cost savings that will cut about $ 3 billion by 2023. Significant cost savings should continue to support Air Canada’s cash flow. May accelerate inventory recovery.

While shrinking operations impact revenue and profit margins, improving air travel demand and cost-cutting measures should drive Air Canada’s finances and, in return, drive a financial recovery. ..

Diverse royalty

Another rebound stock Diverse royalty (TSX: DIV).. The company is Air Miles, Sutton, Mr. Owns and manages franchises such as Mike’s steakhouses and Mr. Lube. The stock can recover sharply as Canadians eat out and start driving again.

At this point, DIV shares are down 27% from pre-crisis market prices. It still offers a large 8.2% dividend yield. It can be an ideal purchase for investors seeking contrarian income.

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Top 2 rebound stocks in 2021

https://www.fool.ca/2021/01/27/top-2-rebound-stocks-for-2021/ Top 2 rebound stocks in 2021

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