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Buy These 6 Top Canadian Stocks for the New Year

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It’s out with the old and in with the new as 2020 gracelessly bites the dust. But while few investors are likely to look back on the year with a fuzzy warm feeling, the New Year will be sure to bring challenges of its own. Today we will examine six of the best stocks to start January on a stronger footing. From Big Five financials to rewarding consumer staples, it’s time to examine this sturdy sextet of TSX stocks for a brighter year ahead.

No need to reinvent the wheel in 2021

You’ll laugh, you’ll cry… you’ll own bank stocks. If anybody thought that the greatest social upheaval in living memory would be easy on the banks, though, 2020 held a rude awakening for them. But this must-have asset band is ending the year on a relatively upbeat note. Having tanked earlier in the year, names like Scotiabank are inching back into investors’ good books. This one packs Latin American growth potential with a rich 5.3% dividend yield.

Why not safety-proof that bank investment with gold? Barrick Gold was the choice of Warren Buffet when he decided it was time for an uncharacteristic dalliance in gold. The billionaire option, Barrick packs access not only to the precious yellow metal, but also to copper. A key commodity for growth investors looking for de facto tech and renewables exposure, copper could boom in years to come.

Diversification is the key to safe stocks

For patriots managing pandemic portfolios, Canadian Tire and Canadian National Rail offer sturdy sources of passive income. CN Rail’s 1.6% dividend yield may be on the smaller end of the scale. However, that beats its closest competitor for yield. It’s also fed by a highly diversified stream of revenues. Canadian Tire is a diversified multi-line retail giant packing a moderate forward dividend of 2.8%.

Methanex has been hitting yearlong highs of late, making it a solid buy for investors seeking strong positive momentum. This major methanol producer, supplier, and retailer may pay a negligible dividend currently yielding less than 0.5%. However, to its wide-moat chops, a capital gains investor can add Methanex’s potential for almost 40% share price appreciation.

Another key chemicals play, Nutrien never seems to excite analysts as much as perhaps it should. Much of this lukewarm reception can be attributed to the still fairly recent merger that created Nutrien. Either way, this is a super wide-moat pick packing a strong consumer staples angle. From precision farming to multi-year defensive attributes, Nutrien marries a 3.8% forward dividend yield with 25% upside potential.

These are six great stocks to buy now, especially for those concerned about the potential for a market crash. Add them to a wish list if you, like master investor Warren Buffett, believe that a stock market bubble is about to burst. With major world events still unfolding, it’s an uncertain time to be in stocks. But by snapping up shares in major blue-chip names from Scotiabank to CN Rail, Canadians can easily add some defensive backbone to a multi-decade personal investment portfolio.

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Victoria Hetherington has no position in any of the stocks mentioned. David Gardner owns shares of Canadian National Railway. The Motley Fool owns shares of and recommends Canadian National Railway. The Motley Fool recommends BANK OF NOVA SCOTIA, Canadian National Railway, METHANEX CORP, and Nutrien Ltd.

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