Many millennials likely got their first taste of the stock market in the previous decade. Fortunately, it was one of the best decades for the stocks in the modern era. Valuations are high as we enter the 2020s, but there are still terrific options available for investors with a long time horizon.
Today I want to look at three stocks that are perfect for a millennial portfolio. These equities offer exposure to growing industries and two of them provide income as an extra boon.
Last year I discussed the rise of artificial intelligence (AI) development. This technology has applications across many industries and is well worth betting on for the long term. Kinaxis (TSX:KXS) is one of the very best Canadian stocks for investors looking for AI exposure. Its shares have climbed 53% year over year as of mid-afternoon trading on January 16.
Kinaxis is expected to release its fourth-quarter and full-year results for 2019 in late February or early March. In the year-to-date period Kinaxis has added large new customers like Honda, Yamaha Motors, and British American Tobacco. This adds to its already impressive stable of clients that includes Ford, Toyota Motors, and Unilever. Its supply chain management software is set to meet rising demand for this kind of technology in the coming years.
The company boasts an excellent balance sheet and is well-positioned for growth in a promising sector. This has been a volatile stock in recent years, but it is well worth holding for a millennial investor.
The catastrophic bush fires in Australia have thrust the issue of climate change to the forefront in 2020. Data has shown that millennials are more socially conscious investors than their older peers. This is one of the reasons TransAlta Renewables (TSX:RNW) is perfect for a millennial portfolio.
In the first three months of 2019 the company reported comparable EBITDA of $313 million compared to $296 million in the prior year. TransAlta closed the acquisition of the Antrim wind project in March 2019. Its Big Level wind project, which was a 15-year PPA with Microsoft, started commercial operation on December 19.
TransAlta stock offers a monthly dividend of $0.07833 per share. This represents a tasty 5.9% yield. Shares are trading near a 52-week high, but the stock still possesses a sub-20 price-to-earnings ratio and a favourable price-to-book value of 1.8.
Sienna Senior Living
Sienna Senior Living (TSX:SIA) owns and operates seniors’ living residences in Ontario and British Columbia. It is the largest long-term care operator in Ontario. By 2030, seniors will number over 9.5 million and make up nearly a quarter of all Canadians. The demand for seniors’ living and long-term care operators will balloon in the coming decades.
In the year-to-date period at the end of the third quarter of 2019, Sienna reported NOI of $119 million compared to $112 million in the prior year. Adjusted funds from operations rose to $72 million, marginally higher than the $71 million posted in the first three quarters of 2018. Revenue climbed 5.3% year over year to $497.6 million.
The stock also offers a monthly dividend payout of $0.078 per share. This represents a solid 4.9% yield. Sienna is expensive right now with a sky-high P/E ratio, but I love its potential as a long-term hold.
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Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. David Gardner owns shares of Ford. The Motley Fool owns shares of and recommends Microsoft. The Motley Fool recommends KINAXIS INC and recommends the following options: long January 2021 $85 calls on Microsoft and short January 2021 $115 calls on Microsoft.