3 Hot Stocks to Buy This July

Looking to diversify or rebalance your portfolio? Here are several hot stocks to buy now for the second half of 2021 that boast income and growth potential.

| More on:
Couple relaxing on a beach in front of a sunset

Image source: Getty Images.

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

Diversifying your portfolio with investments from a broad area of the market is something that should be top of mind to every investor. Unfortunately, selecting one or more investments can be a daunting task, particularly for newer investors. That’s not to say that the market can’t provide! Here are some hot stocks to buy this July for nearly any portfolio.

The buy-and-hold bank

It would be nearly impossible to compile a list of hot stocks to buy without mentioning at least one of Canada’s big banks. Today, the big bank to consider is Bank of Nova Scotia (TSX:BNS)(NYSE:BNS).

Scotiabank offers a serious advantage over its peers that comes down to growth and income potential.

In terms of growth, the bank has expanded into the Pacific Alliance member nations heavily, leading to the bank’s de facto status as a preferred lender in the region. That move has already provided lucrative growth to Scotiabank’s international segment. Additionally, further growth is expected to continue for the foreseeable future.

On the income side, Scotiabank already boasts one of the tastiest dividends among its big bank peers. The current yield works out to 4.44%, meaning a $25,000 investment will earn $1,110 in the first year alone. Even better is the fact that Scotiabank still trades at a discounted level compared to historical levels.

Oh, and to top it off, there’s a good chance that once dividend increases resume (they were halted at the onset of the pandemic), Scotiabank will provide a handsome uptick. That factor alone makes Scotiabank one of several hot stocks to buy this July.

Renewable energy is always a great buy

Now that the warmer weather is finally here, let’s take a moment to talk about power. Specifically, I’m referring to renewable energy, which is a key factor in considering TransAlta Renewables (TSX:RNW).

TransAlta is a “best-of-both-worlds”-type of investment. The company benefits from the defensive business model that traditional utilities adhere to. This means that TransAlta continues to generate a safe and recurring stream of revenue. That revenue stream is backed by regulated contracts that can span decades.

The other appealing point to make comes in the form of growth. Governments are shifting towards generating energy from renewable sources. This leaves traditional utilities with massive costs to transition to renewables.

In the case of TransAlta, the company already has an all-renewable portfolio of well-diversified facilities located across Canada, the U.S., and Australia. If that weren’t reason enough to consider investing, TransAlta also offers a juicy 4.47% dividend with a monthly distribution.

Go on; become a landlord. I’ll wait

Buying a rental property to generate income is one of the oldest and most reliable ways to generate a viable income stream. Unfortunately, an influx of people moving to Canada’s metro areas has pushed home prices into the stratosphere. The average price of a home in the GTA is now well in excess of $1.2 million, effectively pricing out many.

So, where should prospective landlords turn to? To answer that, let’s look at RioCan Real Estate (TSX:REI.UN).

RioCan is one of the largest REITs in Canada. The company has a broad range of properties that were previously focused on commercial retail. More recently, RioCan has shifted its focus to mixed-use residential and retail properties in Canada’s metro areas.

It is those properties, known as RioCan Living, where there is a significant opportunity. RioCan’s mixed-used properties consist of residential towers that are built on top of several floors of retail. Furthermore, those properties are located in high-demand locales in Canada’s metro areas along transit routes.

The properties provide residents with an alternative to long commutes while also generating revenue for the company. That helps make TransAlta one of the hot stocks to buy in July, but there’s still more.

That revenue comes back to investors in the form of a handsome monthly dividend. The current yield works out to an attractive 4.35% yield.

The hot stocks to buy are waiting

No stock is without risk. That being said, the three stocks noted above are all hot stocks to buy with massive growth and income-earning potential. In other words, they should be part of any well-diversified portfolio.

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 Demetris Afxentiou owns shares of The Bank of Nova Scotia. The Motley Fool recommends BANK OF NOVA SCOTIA.

More on Dividend Stocks

edit Back view of hugging couple standing with real estate agent in front of house for sale
Dividend Stocks

Why Real Estate Stocks Are a No-Brainer Addition to Your Portfolio

Real estate stocks, especially REITs, offer some distinct advantages over other types of stocks, making them must-have additions to most…

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

3 Top TSX Dividend Stocks to Buy for Monthly Passive Income

Top TSX stocks with monthly dividends now trade at cheap prices for investors seeking passive income.

Read more »

Canadian Dollars
Dividend Stocks

Create Free Passive Income and Turn it Into Thousands With 1 TSX Stock

If you can't afford to invest, you can certainly create passive income another way and use that to invest in…

Read more »

Payday ringed on a calendar
Dividend Stocks

Canadian Dividend Investors: 2 ETFs That Pay Monthly Income With High Yields

Dividend ETFs often pay out monthly distributions compared to dividend stocks.

Read more »

think thought consider
Dividend Stocks

2 Stocks I Own and Will Buy More of if They Fall

Stocks tend to go up in the long run. Therefore, buying a basket of diversified stocks on dips should lead…

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

2 Oversold TSX Dividend Stocks to Buy for Passive Income

Blue-chip dividend stocks such as Royal Bank of Canada and Manulife Financial pay investors a tasty forward yield.

Read more »

TFSA and coins
Dividend Stocks

TFSA Passive Income: 3 Solid Stocks to Earn $355 Every Month

Looking to earn steady passive income? Here are three solid TSX stocks that can help you earn a worry-free passive…

Read more »

Technology
Dividend Stocks

RRSP Investors: 2 Stocks to Buy in August for Dividends and Capital Gains

RRSP investors can still find top TSX dividend stocks trading at cheap prices today for a buy-and-hold portfolio.

Read more »