Although investors need to keep in mind many different factors while in the stock market, a lot of the process can be made easier by investing in solid companies. In Canada, many of the best companies are listed on the S&P/TSX 60 index. This is an index that tracks the leading companies among the leading industries in Canada. The companies listed have all proven themselves within the country and would make excellent additions to your portfolio. Of course, some will do better than others. Which three should you consider?
Canada’s top growth stock
It shouldn’t be surprising that Shopify (TSX:SHOP)(NYSE:SHOP) is listed on the TSX 60 index. In 2020, Shopify became the country’s largest company by market cap. Since its IPO, Shopify has returned an incredible amount of wealth to shareholders due to its strong positioning within the e-commerce industry. In addition to its business in Canada, the company holds the second-largest market share of the online retail space in the United States behind only Amazon. That means it has already beat out companies like Walmart, eBay, and Apple.
Shopify is led by its founder-CEO, Tobi Lütke. He is one of the most well-respected CEOs by financial media for his humble and passionate approach to running the company. He has repeatedly discussed his commitment to step down from his position if his colleagues ever feel like another individual is better suited to lead the company. With this sort of individual running Shopify, investors should remain confident in the company regardless of any downturn it may experience.
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This company is so much more than you’d expect
Another great company to own would be Telus (TSX:T)(NYSE:TU). This company is mainly known for its vast telecommunication network coverage across the country. Currently, its network is the largest in the country (tied with BCE). In Q1 2021, Telus reported that it had more than 16 million customer connections, up from 15.9 million in the previous quarter. While those numbers demonstrate the size of this company, its telecommunication business isn’t even its most exciting aspect.
For growth investors, Babylon by Telus Health is likely the most intriguing part of its overall business. Babylon is a mobile app where patients are able to interact with primary health providers from anywhere. In other words, it’s the company’s play at the up-and-coming telehealth industry. Meanwhile, dividend investors may want to focus on its attractive 4.81% forward dividend yield. There’s a lot to like in this company regardless of your investing style.
Canada’s top sector
Finally, you may want to add one of Canada’s Big Five banks to your portfolio. All five constituents are solid companies with a large addressable market. However, if you had to choose, Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) may be the best choice. In addition to its Canadian business, Bank of Nova Scotia is well exposed internationally. The company is hoping its presence in the Pacific Alliance will pay off in the near future. This is a region that economists are predicting will grow at a faster rate than the G7 over the coming years.
Bank of Nova Scotia has outperformed the broader market over the past few months, returning nearly 17% year to date. For dividend investors, its 4.59% forward dividend yield should be very attractive. Overall, this is a well-run company with qualities that should appeal to both growth and dividend investors.
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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.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Fool contributor Jed Lloren owns shares of Apple and Shopify. David Gardner owns shares of Amazon and Apple. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Amazon, Apple, Shopify, and Shopify. The Motley Fool recommends BANK OF NOVA SCOTIA, eBay, and TELUS CORPORATION and recommends the following options: long January 2023 $1140 calls on Shopify, short January 2023 $1160 calls on Shopify, long January 2022 $1920 calls on Amazon, short March 2023 $130 calls on Apple, short June 2021 $65 calls on eBay, short January 2022 $1940 calls on Amazon, and long March 2023 $120 calls on Apple.