Don’t let the recent success of the Canadian stock market fool you into thinking you need a lot of cash to be investing today. Valuations may be rising, but there are plenty of top stocks trading at affordable stock prices.
The S&P/TSX Composite Index is up close to 20% since the beginning of 2021. Canadian investors have been enjoying an incredible bull run since the market crash in early 2020.
The current bull run has led to a rise in valuations, putting many of the top growth stocks in very frothy territory. From a valuation perspective, it’s not cheap to be investing in Canadian stocks right now. However, there are lots of companies with inexpensive stock prices. This means it doesn’t necessarily require a lot of capital to be investing today.
With just $300, Canadian investors can own this entire basket of three market-beating stocks.
Looking strictly at the stock price, Lightspeed (TSX:LSPD)(NYSE:LSPD) is far from the most expensive stock on the TSX. But when looking at valuation, not many other Canadian companies are trading in the same range as this tech stock.
Shares of Lightspeed are trading at a price-to-sales ratio above 60. It’s been crushing the market since it became a public company in 2019, but at that kind of valuation, volatility should certainly be expected.
Many Canadian investors are willing to pay a premium for Lightspeed because of its growth potential. The tech company continues to grow quarterly revenue at a rate above 50%, as its product offering expands along with its international presence.
The comparisons with Shopify are coming up more and more now, and I can understand why. There’s a lot of growth ahead for Lightspeed, and it’s still only valued at a market cap of $20 billion.
If you can handle the expected volatility, this is one growth stock that I believe is worth every penny of its steep price tag.
WELL Health Technologies
WELL Health Technologies (TSX:WELL) isn’t exactly a value stock, but it is compared to Lightspeed. It’s also trading below $10 a share right now, so it requires a small commitment to open a position.
Shares of this Canadian stock surged more than 400% in 2020. The pandemic, unsurprisingly, led to a dramatic increase in telemedicine services last year.
As vaccination numbers continue to increase as we slowly move past this pandemic, it’s not surprising to see the stock cool off as of late. Shares are flat on the year and down more than 10% below all-time highs.
In the short term, it’s anybody’s guess as to how this Canadian stock will perform. But over the long term, the growth potential of the entire telemedicine industry is more than enough of a reason to have WELL Health on my watch list this month.
Sun Life Financial
I won’t argue that insurance is the most exciting or growth-filled industry to be investing in. But that doesn’t mean an insurance leader doesn’t belong in a long-term investment portfolio.
This Canadian stock can bring much-needed stability to a portfolio, especially if you own growth stocks like Lightspeed. Sun Life might not be able to match Lightspeed’s growth, but you can bet that it won’t drop nearly as much during inevitable market downturns.
In addition to stability, this Dividend Aristocrat stock will provide your portfolio with a dependable stream of passive income. Its annual dividend of $2.20 per share is good enough for a yield above 3% at today’s stock price.
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 Nicholas Dobroruka owns shares of Lightspeed POS Inc and Shopify. The Motley Fool owns shares of and recommends Lightspeed POS Inc. and Shopify. The Motley Fool recommends the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify.