The tech sector is beloved by growth investors due to its potential to create winning companies. However, there are some stocks that operate outside the tech sector that are very deserving of a spot in your portfolio. By holding positions in these companies, investors could diversify their portfolios while not sacrificing potential gains. Here are two of the top Canadian stocks outside the tech sector.
This company could become Canada’s top bank
When it comes to investing in the Canadian market, the banking industry stands out as a favourite for many. Because of the regulated nature of Canada’s banking system, companies in this industry tend to be much more stable and less risky than their peers in other countries. In addition, by investing in the Big Five, Canadians can take advantage of a very well-established oligopoly. Of that group, Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) remains my top pick.
I have grown to admire the company due to its large international presence. While its peers within the Big Five have committed much of their resources to serving customers within Canada and the United States, Bank of Nova Scotia has chosen to explore other areas. The company has a very large presence within the Pacific Alliance, which represents Chile, Columbia, Mexico, and Peru. Economists are forecasting strong returns in that region due to a rapidly growing middle class.
Bank of Nova Scotia has performed admirably over the past year, gaining 41.6%. Also a Dividend Aristocrat, the company has been able to increase its dividend distribution in each of the past 10 years. Whether you’re looking for more growth or hoping to diversify into dividend companies, Bank of Nova Scotia has a little bit of something for everyone.
This stock has skyrocketed out of the pandemic
Keeping in line with companies that have excellent growth potential in addition to strong dividend qualities, goeasy (TSX:GSY) is a company that Canadians should become very familiar with. goeasy operates two business segments. The first is easyfinancial, which provides high-interest loans to subprime borrowers. The second is easyhome, which sells furniture and other home goods on a rent-to-own basis. Because of the pandemic, goeasy has seen both business segments prosper.
Over the past year, goeasy has been one of Canada’s most impressive stocks. Over that period, it gained 202.8%. Interestingly, the company is still valued at a very low $2.64 billion. This means that goeasy could still see massive gains in the coming years.
The company offers a low dividend yield of 1.64%. However, if you were to buy in today, there’s a chance your yield on cost could be very impressive in a few years. Over the past seven years, goeasy has managed to increase its dividend by 776%! With an extremely low payout ratio of 13.87%, the company should have no issue continuing to increase its dividend over the coming years.
Investors wanting to diversify out of the tech sector don’t need to sacrifice gains to do so. Investing in companies like Bank of Nova Scotia and goeasy are two examples of how an investor can diversify into more stable industries while still capturing market-beating returns. Those two companies have performed very strongly over the past year and offer attractive dividends.
Fool contributor Jed Lloren has no position in any of the stocks mentioned. The Motley Fool recommends BANK OF NOVA SCOTIA.