Canadian Investors: 2 of the Best Stocks to Buy Now

Canadian investors can do their portfolios real good by buying these two TSX stocks right now!

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Shopify (TSX:SHOP)(NYSE:SHOP) and Brookfield Infrastructure Partners (TSX:BIP.UN)(NYSE:BIP) are two of the best stocks to buy now. These two companies have outperformed in the long run and are likely to reward its long-term shareholders with extraordinary returns.

Shopify stock

Shopify is one of the best stocks to buy now to gain from the long-term e-commerce growth trend. The growth stock has appreciated more than 4,000% in the past five years, turning a $10,000 investment to about $417,000 in the period!

The company is still doing very well. It reported splendid first-quarter results. Shopify stock’s revenue was US$988.6 million for the quarter ended March 31 — an increase of 110% from US$470.0 million in the quarter of the prior year. The reopening of the global economies and government stimulus measures helped boost e-commerce sales around the world.

Cost of revenues of US$429.9 million for the quarter didn’t jump as much, increasing 102%, which is good to see. As a result, its gross profit climbed 117% to US$558.7 million.

The tech stock also swung from a net loss of US$31.4 million to a net income of almost US$1.3 billion. Notably, the magnificent net income did not have anything to do with the company’s operations. Rather, it included a US$1.3 billion unrealized gain on its equity investment in Affirm due to its initial public offering in January 2021.

The adjusted net income is a better metric to gauge the company’s performance. For the quarter, Shopify’s adjusted net income was US$254.1 million — an increase of 11 times from US$22.3 million in the previous year’s quarter. On a per-share basis, it was US$2.01, up more than 10 times.

According to the analyst consensus price target, Shopify stock is undervalued by about 21% and can appreciate approximately 27% over the next 12 months.

A dividend stock Canadians would love

Brookfield Infrastructure is at the top of the pack among its utility peers. It delivered annualized returns of about 21% in the past five years. That’s roughly three times the returns versus the U.S. and Canadian utility index returns of 7-8%!

Unlike Shopify stock, BIP stock will generate more predictable returns. The global infrastructure is a fitting choice for those seeking a passive, growing income. The company enjoys high EBITDA margins of +50%. It has paid a growing dividend since inception more than 10 years ago. Its five-year dividend-growth rate is 8.8%.

Brookfield Infrastructure offers a safe dividend. Approximately 95% of its cash flow is regulated or contracted.

Because of the utility company’s vast geographical reach across multiple continents, it has a growing empire of utilities, transport, midstream, and data infrastructure assets. Growth will come organically as well as from acquisitions and capital recycling.

BIP provides a dividend yield of about 3.8% today with a payout ratio of about 70% of funds from operations. That dividend stream is poised to grow. Management aims to increase that cash distribution by 5-9% per year.

According to analysts, BIP stock is reasonably valued and can appreciate approximately 9% over the next 12 months.

The Foolish takeaway

Look nowhere else for the best stocks. Buy Shopify stock and Brookfield Infrastructure Partners now and buy more when they correct. They are more likely to deliver outperforming returns than not.

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 Kay Ng owns shares of Brookfield Infrastructure Partners and Shopify. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Shopify and Shopify. The Motley Fool recommends BROOKFIELD INFRA PARTNERS LP UNITS and Brookfield Infrastructure Partners and recommends the following options: long January 2023 $1140 calls on Shopify and short January 2023 $1160 calls on Shopify.

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