If you’re just getting started with investing, the number of choices can seem overwhelming. Do you go with stocks or mutual funds? Actively managed funds or index funds? Canadian stocks or foreign stocks? These are just some of the big picture decisions you’ll need to make on your journey as a beginner investor. And if you choose to go the route of picking stocks, you’re faced with the even bigger decision of which ones to buy.
Before buying any stock as a beginner, you should speak with a financial advisor. There are many variables that go into choosing the right stock and, truth be told, if you don’t have a ton of information at your fingertips, it may be easier to go with a passively managed index fund. But assuming you want to go the stock picking route, here are five relatively safe stocks that can get you on the right track.
The Toronto-Dominion Bank is one of Canada’s best bank stocks. With a 51% return over the past five years, it has easily outperformed the TSX in the same period. TD bank is experiencing healthy earnings growth around 10% a year and pays dividends, so the stock can be counted on for steady income in the future. The company also makes a lot of its money in the U.S., so it can remain profitable even if the Canadian economy slows down.
Canadian Tire (TSX:CTC.A)
You’re probably familiar with Canadian Tire. One of the nation’s most popular auto parts and outdoor gear stores, it has a long history of delivering value to customers. It has an equally long history of delivering value to shareholders, with a 50% return over the past five years. Canadian Tire shares are priced cheap compared to earnings, and they pay dividends, while profits are growing by about 15% a year.
Fortis is a company you can count on for steady dividend payments, as it pays a portion of its profits out to shareholders every quarter. The company has increased these dividend payments every year for the past 45 years, so you can expect the income from Fortis shares to go up. The company also has a healthy balance sheet and steady revenue growth to keep the payments coming.
Canada Goose is one of Canada’s most popular clothing companies. With a huge international footprint, it has loads of foreign markets to power its growth. Speaking of growth, this company grew its profits by 34% in its most recent quarter. Is it any wonder this stock has more than doubled in price in under two years?
CN Railway is a bedrock of the Canadian economy. With a 100-year history, it has stood the test of time and delivered value to investors year after year. Speaking of value, according to Fool Contributor Andrew Walker, a $10,000 position with dividends reinvested in Canadian National Railway 20 years ago would be worth $200,000 today. And, after all these decades, CN is still growing adjusted earnings at 24% a year, so there’s no reason it can’t keep outperforming in the long haul.
Motley Fool Canada's market-beating team has just released a brand-new FREE report revealing 5 "dirt cheap" stocks that you can buy today for under $49 a share. Our team thinks these 5 stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune. Don't miss out! Simply click the link below to grab your free copy and discover all 5 of these stocks now.
Fool contributor Andrew Button has no position in any of the stocks mentioned. David Gardner owns shares of Canadian National Railway. The Motley Fool owns shares of Canadian National Railway. CN is a recommendation of Stock Advisor Canada.