3 of the Smartest Canadian Stocks to Buy in December

The recent market correction has opened up some great buying opportunities. Here’s three of the smartest Canadian stocks to buy this December.

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Canadian stocks have just pulled back very severely from all-time highs. While panicked speculators sell in the madness of a correction, smart investors wait patiently to snatch up great stocks at bargain prices. If you want to build a fortune in the stock market, you need patience, a long-term mindset, and a calm, rational demeanour.

It is never easy to buy stocks when everyone is selling. Yet that is a wonderful way to increase your returns over time. As Warren Buffett has said, “When it’s raining gold, reach for a bucket, not a thimble.” If you have a bucket today, here are three Canadian stocks I would consider swiping up on the decline:

Enbridge: A top Canadian dividend stock

Enbridge stock gave up nearly six months of gains over November. In fact, since November 5, it has pulled back nearly 8.5%. This Canadian stock was punished due to a fast decline in oil prices over the new COVID-19 variant news. Likewise, Enbridge received a negative regulatory decision regarding its Mainline pipeline contracting. Fortunately, while interim toll agreements roll off, Enbridge has sufficient time to create an economic tolling or cost-of-service model for the Mainline.

Overall, Enbridge has a large and diverse portfolio of energy infrastructure assets. In 2021 alone, it will place $10 billion of new projects (including the new Line 3 pipeline) into service. All this should provide solid cash flow growth in the coming year.

Today, at $49 per share, Enbridge yields a 6.9% dividend. Just a few days ago, Enbridge announced it would raise its annual dividend by $0.10 per share (or 3%). It will likely grow its dividend by a similar rate for the coming years ahead.

Shopify: The top Canadian technology stock

With a market capitalization of $241 billion, Shopify is the largest stock on the TSX for a reason. The company has built out an e-commerce platform that could one day rival Amazon.com to some extent. Shopify’s stock has recently pulled back around 13%. It certainly looks more attractive here than at 52-week highs.

The fact is, Shopify is not a cheap stock. It has a price-to-sales ratio of 42. Perhaps it is deserved, especially considering it is growing revenues by +50% a year and earnings are growing even faster. It has tons of growth optionality both in terms of products/services and geographic reach. The digitization of commerce should continue to be a strong growth tailwind for this Canadian stock for many years to come.

Brookfield: A top financial stock for any portfolio

Brookfield Asset Management is the one Canadian stock in this list that experienced only a minor decline on the recent market correction. While Brookfield is one of the largest asset managers in the world ($650 billion of assets under management), it still trades at a discount to peers and below intrinsic value.

With interest rates near all-time lows, Brookfield has been seeing institutional capital flock to it. As a result, over the past five years, BAM has been growing distributable earnings by a compounded annual growth rate of 32%. Earnings growth is accelerating, as BAM starts to realize gains from mature funds and assets.

This Canadian stock has a great balance sheet, a top management team, and a stable growth profile for years ahead. It looks like a great diversified anchor stock for any investor’s 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.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Fool contributor Robin Brown owns shares of Amazon and Brookfield Asset Management Inc. CL.A LV. The Motley Fool owns shares of and recommends Shopify. The Motley Fool recommends Amazon, Brookfield Asset Management Inc. CL.A LV, and Enbridge.

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