September often signals a transition for the stock market as it emerges from its summer hiatus. In 2024, North American markets continue to perform robustly, with the latter part of the year expected to be shaped significantly by interest rate changes and political events in the U.S. As we enter the fourth quarter, certain market sectors present promising opportunities, particularly for investors seeking value in small-cap and dividend-paying companies.
In this article, we delve into five carefully selected stocks that align with these under-appreciated areas, offering potential for growth and stability. Here’s a closer look at one standout pick that we believe will benefit your investment portfolio.
“Best Buys Now” Pick #1: Gibson Energy (TSX)
Overview of Gibson Energy
If you’re not yet acquainted with Gibson Energy (TSX), it’s a company that plays a critical role in Canada’s oil and gas industry. The company owns essential infrastructure for transporting liquids, which is vital for the smooth operation of this sector. As a key player in this niche market, Gibson Energy provides a stable and reliable investment opportunity.
Recent Developments and Investment Potential
A notable development for Gibson Energy occurred in mid-July when it successfully extended a long-term contract with a globally recognized exploration and production (E&P) company at its Gateway Terminal in Texas. This extension is particularly significant as the renewal of contracts at Gateway had been a source of uncertainty affecting Gibson’s stock price. With this recent contract renewal, concerns have diminished, positioning Gibson Energy favorably in the market.
Despite this positive news, market skepticism persists, creating a valuable investment opportunity. Gibson Energy’s dividend yield stands at an impressive 7.2%, a figure that reflects cautious market sentiment. For investors, this high yield presents a compelling reason to consider Gibson Energy, especially given its track record of steadily increasing dividends.
Dividend Yield and Market Dynamics
Dividend-paying stocks, such as Gibson Energy, are well-positioned to benefit from potential rate cuts by the Bank of Canada. Additionally, if the Federal Reserve follows suit with rate reductions, dividend stocks could see increased appeal. Investing in a stock with a robust >7% dividend yield offers a more attractive return compared to diminishing rates in cash accounts. As central banks adjust their policies, companies like Gibson Energy stand to gain from an influx of investor funds seeking higher returns.
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As we navigate through the latter part of 2024, Gibson Energy (TSX) emerges as a standout choice for those looking to invest in dividend-paying stocks with significant growth potential. With a solid dividend yield and a promising outlook following recent contract renewals, Gibson Energy offers a unique opportunity for investors aiming to grow their savings in a dynamic market environment.