To those new to the market, investing can be a daunting and confusing task. The need to diversify, accept some risk, and part with hard-earned money in hopes of long-term returns can be overwhelming. Fortunately, the market gives us plenty of opportunities. Here’s a four-stock portfolio to get started with this year.
Stock #1 – Start with a defensive base to build on
BCE (TSX: BCE)(NYSE: BCE) is a favourite among countless investors, and for good reason too. The telecom is a behemoth in the sector, generating a predictable (and growing) revenue stream. That revenue stream is also diversified across multiple segments in addition to its core-subscription services.
The importance of maintaining wireless and internet connections increased during the pandemic. Those connections (and the revenues they generate) are now necessities. This is especially true considering that many students and office workers are now learning and working from home.
That stable revenue stream also means investors can generate a handsome passive income. The current yield works out 5.42%, meaning that a $30,000 investment will generate over $1,620 income during the first year. That number can grow further if those dividends are reinvested until needed.
In other words, buy it, hold it, forget about it.
Stock #2 – Power up your portfolio
Another great passive income stock to add to your 4-stock portfolio is Enbridge (TSX: ENB)(NYSE: ENB). The energy infrastructure giant is best known for its massive pipeline business, but in reality, there are other intriguing segments. Examples of this include the company’s growing renewable energy business. In fact, Enbridge is already one of the largest producers of renewable energy.
The company’s well-known pipeline business remains a cash cow. The segment is often compared to a toll-road network, as Enbridge does not charge based on the commodity price. This makes the company largely immune to volatile oil prices. Further to this, the sheer volume and necessity of the crude and gas further the appeal of this as a great stock.
In terms of income, Enbridge provides a quarterly dividend that carries an insane 6.71% yield. That same $30,000 investment directed an Enbridge will generate just over $2,000 in the first year.
Stock #3 – You can bank on this
I would be remiss if I didn’t mention at least one of Canada’s big banks as part of a four-stock portfolio. That bank to consider adding is none other than the Canadian Imperial Bank of Commerce (TSX: CM)(NYSE: CM).
There’s plenty to love about CIBC. The bank has a solid domestic segment in Canada and a growing international segment that is focused on the U.S. market. Exposure to the U.S. market has provided the bank with solid growth over the past few years.
That growth has also fed the bank’s dividend, which currently has a yield of 3.98%. If that wasn’t enough incentive, prospective investors should note that the dividend rate may soon be heading north again. A moratorium on dividend hikes set during the onset of the pandemic was recently removed.
In other words, CIBC and its peers may soon provide a handsome uptick.
Stock #4 – Who’s hungry?
Some of the best stocks to buy are those that we interact with on a daily basis. Now that we’ve mentioned utilities, telecoms and a bank, how about some food? That’s where Restaurant Brands International (TSX: QSR)(NYSE: QSR) comes into play. Restaurant Brands is the name behind some of the most iconic food brands.
That list includes Burger King, Tim Hortons, and Popeyes. The company has done a superb job of increasing cash flow, and the international exposure of those brands. If that wasn’t enough, Restaurant Brands recently announced a deal for its fourth brand- U.S.-based FireHouse Subs.
Investors can expect the same growth and expansion potential from that newest brand to come over the next few years.
In the interim, investors can take solace in the juicy quarterly dividend that currently works out to a tasty 3.56% yield.
Final thoughts
No investment is without risk, but fortunately, the aforementioned stocks all have some defensive appeal within their respective segments. Additionally, they all provide investors with a handsome dividend, making them perfect stocks to build out any four-stock portfolio.
