Reddit stocks can go up or down significantly on any trading day. When you buy a Reddit stock, it’s like making a bet at the casino and potentially a quick way to lose money.
If you’re looking to make big bucks on the stock market long term, you should consider these top TSX stocks.
The advent of the internet was a great game changer for businesses. Whereas brick-and-mortar stores are limited to catering to customers living within certain kilometres of the stores, the internet has made available to e-commerce stores essentially the whole wide world of potential customers!
From 2014 to 2020, while maintaining gross margins of +50%, Shopify increased its revenue by about 30 times! Its revenue growth is showing signs of acceleration. In the last 12 months, its revenue almost doubled versus its three-year revenue-growth rate of approximately 64%.
The global e-commerce company provides the tools needed for businesses to sell online. It currently powers more than 1.7 million businesses in more than 175 countries. Once businesses start using Shopify, they’re unlikely to switch to another platform, which would trigger downtime for the businesses. Importantly, Shopify sees plenty of opportunities for innovation, as it continues to reinvest into the business and stay relevant for years to come.
The growth stock has traded essentially sideways since June 2020 and is fairly valued currently. If you don’t own shares, you can consider starting a position today and adding more on at least a 10% dip.
A predictable dividend stock for you
Investors can ignore Reddit stocks any day for Brookfield Infrastructure Partners (TSX:BIP.UN)(NYSE:BIP), which leaves no guesswork. The global utility stock has outperformed the industry and the market since its inception. With dividend reinvestment, its five-year rate of return was about 21% on the TSX versus the S&P 500’s 17% and the Canadian and U.S. utility indices’ 10%.
The utility is bound to become more valuable year after year. It has 19 managing partners with extensive experience in the field. About 215 corporate professionals and 41,000 operating employees around the world also help its businesses run smoothly.
With skin in the game, managing partners have executed the company’s long-term value-creation strategy — buying high-quality assets on a value basis, optimizing the assets, and selling mature assets, often for very strong long-term returns. For example, recently BIP sold assets for proceeds of US$1.7 billion, equating to an after-tax rate of return of 34%.
Brookfield Infrastructure’s quality, long-life assets produce primarily regulated or contracted cash flows that are indexed to inflation. This has assisted in its cash-distribution-per-unit growth at a compound annual growth rate of about 10% since 2009.
The dividend stock is currently fairly valued and offers an initial yield of 3.7%. Interested investors can start a position and add more on dips.
The Foolish takeaway
Instead of betting on Reddit stocks and hoping they’ll go your way on the day or in the coming week, consider investing your hard-earned money in proven stocks like Shopify and Brookfield Infrastructure. When they correct meaningfully, you’ll have the confidence to add to your investments for greater long-term returns.
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. The Motley Fool owns shares of and recommends Amazon and Shopify. The Motley Fool recommends BROOKFIELD INFRA PARTNERS LP UNITS and Brookfield Infrastructure Partners and recommends the following options: long January 2022 $1,920 calls on Amazon, long January 2023 $1,140 calls on Shopify, short January 2022 $1,940 calls on Amazon, and short January 2023 $1,160 calls on Shopify. Fool contributor Kay Ng owns shares of Amazon, Brookfield Infrastructure, and Shopify.