Investors tend to look for stocks that have a strong future outlook. Why invest in something that will grow slower than the rest of the market? In terms of profitability and returns, stocks such as Cathedral Energy Services and Freehold Royalties are expected to outperform its peers in the future. Whether it be a well-known tech stock or a risky small-cap, I believe diversification towards growth can add value to your current holdings. Below I’ve compiled a list of stocks with a bright future ahead.
Cathedral Energy Services Ltd. (TSX:CET)
Cathedral Energy Services Ltd. provides directional drilling services to oil and natural gas exploration and development entities in western Canada and the United States. The company employs 356 people and with the market cap of CAD CA$78.55M, it falls under the small-cap group.
Want to know more about CET? Check out its fundamental factors here.
Freehold Royalties Ltd. (TSX:FRU)
Freehold Royalties Ltd. develops and produces oil and natural gas primarily in Western Canada. Freehold Royalties was started in 1996 and with the stock’s market cap sitting at CAD CA$1.46B, it comes under the small-cap category.
FRU’s forecasted bottom line growth is an optimistic 31.98%, driven by the underlying sales growth of 6.59% over the next few years. Though some cost-cutting activities may artificially inflate margins, it appears that this isn’t solely the case here, as profit growth is also coupled with top-line expansion. This prospective profitability should trickle down to shareholders, with analysts expecting the company to generate a positive return on equity of 5.08%. FRU’s bullish prospects make it an interesting stock to invest more time to understand how it can add value to your portfolio. Could this stock be your next pick? Other fundamental factors you should also consider can be found here.
SEMAFO Inc. (TSX:SMF)
SEMAFO Inc., a mining company, engages in the exploration and production of gold properties in West Africa. Founded in 1994, and currently lead by Benoit Desormeaux, the company size now stands at 1,695 people and with the company’s market capitalisation at CAD CA$1.09B, we can put it in the small-cap group.
SMF is expected to deliver a buoyant earnings growth over the next couple of years of 38.39%, bolstered by an equally impressive revenue growth. Profit growth, coupled with top-line expansion, is a positive indication. This is because net income isn’t artificially inflated by unsustainable activities such as one-off cost-reductions expected in the future. This prospective profitability should trickle down to shareholders, with analysts expecting the company to generate a positive return on equity of 10.91%. SMF’s bullish prospects on both the top and bottom lines make it an interesting stock to invest more time to understand how it can add value to your portfolio. Want to know more about SMF? Take a look at its other fundamentals here.
For more financially robust companies with high growth potential to enhance your portfolio, explore this interactive list of fast growing companies.