New to Investing? Check Out These 3 Safe Stocks

Canadians who are new to the investing world can pick from among three safe stocks for beginners.

| More on:
edit Safety First illustration

Image source: Getty Images

People holding mostly cash might be better off putting savings to work in the face of an impending stagflation. Committing even a small amount will result to an additional income, if not money growth over time.

The TSX is your supermarket for stocks, although risks are ever present. Nonetheless, newbies can mitigate the risks by picking the right assets. If you don’t have investment experience yet, check out three highly recommended stocks for beginners.

Most valuable company

Royal Bank of Canada (TSX:RY)(NYSE:RY) will not disappoint seasoned investors and newcomers. This $183.73 billion bank is not only Canada’s largest publicly listed company but also the largest financial institution. It has been operating since 1864 and paying dividends since 1870. The current yield is 3.70%.

Look beyond the price and instead, focus on the safety of your capital. No stock is immune to market volatility or correction, but RBC offers peace of mind. In the pandemic-induced market selloff in March 2020, the share price dropped to as low as $71.93.

As of May 2, 2022, RBC trades at $129.70 per share, or 80.3% higher than its COVID-low. Since the big bank is a matured, blue-chip company, it bounces back from market corrections every time. The situation today is no exception. Its growth might stall, but the dividend payouts should continue without fail.

Despite the headwinds, RBC is in expansion mode. The Canadian bank will purchase Brewer Dolphin via an all-cash transaction worth $2.6 billion. Its acquisition of the independent provider of discretionary wealth management services will make RBC’s wealth management business the third largest in the U.K. and Ireland markets.

Outperformer and reliable income provider

TELUS (TSX:T)(NYSE:TU) is an easy pick if the nature of the business is your primary consideration. The $43.68 billion company provides essential telecommunications and information technology products. It also operates in an oligopoly, and, therefore, there’s hardly competition or new entrants in the capital-intensive industry.

Performance-wise, the telco stock outperforms the broader market year do date (+8.07% versus 2.50%). Income-wise, the dividend offer is an attractive 4.07%. Also, TELUS’s total return in 3.01 years is a respectable 48.64% (14.10% CAGR). Thus, you get real value for money at $31.88 per share.

TELUS is second to BCE in the telecom space and will probably slide to third if Rogers Communications obtains approval to take over Shaw Communications. Still, it should be the top 5G stock.

Rising net income

Imperial Oil (TSX:IMO)(NYSE:IMO) in the volatile energy sector is ideal for newbies. The $43.6 billion integrated oil & gas company packs a mean dividend track record and fantastic dividend-growth streak. Besides paying a dividend for more than 140 years, it has raised its dividend for 27 consecutive years.

This energy stock is a steal at $65.17 per share, despite its 43.71% year-to-date gain. Given the favourable pricing environment, expect Imperial Oil to deliver higher financial results across all business lines in the coming quarters. In Q1 2022, net income increased 199.2% to $1.17 billion versus Q1 2021.   

Common route

Whether you’re an old or new player, stock investing is the common route to hedge against rising prices. However, first timers should limit their choices to dependable companies like RBC, TELUS, and Imperial Oil.

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 Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends ROGERS COMMUNICATIONS INC. CL B NV and TELUS CORPORATION.

More on Stocks for Beginners

clock time
Stocks for Beginners

3 Stocks to Start Investing Today

Looking for a set of stocks to start investing today? Here are some great options that offer growth and income…

Read more »

Chalk outline of two arrows pointing in opposite directions
Stocks for Beginners

How to Save Thousands Per Year With Your RRSP

If you can hit your RRSP contribution limit each year, you could save thousands in taxes that could help boost…

Read more »

Portrait of woman having fun in the street.
Stocks for Beginners

New Investors: 3 Dividend Stocks to Buy Soon

Are there too many stocks to choose from? New investors can start their research in these solid dividend stocks!

Read more »

edit Sale sign, value, discount
Stocks for Beginners

5 Amazing Stocks That Are on Sale Today

After the recent stock market correction, tonnes of top-quality stocks are on sale today. Here are five amazing stocks to…

Read more »

stock analysis
Stocks for Beginners

2 Simple Strategies That Canadian Investors Can Use to Start Investing in Stocks

Here are two of the simplest and best investing strategies for Canadians to start investing in stocks today.

Read more »

Target. Stand out from the crowd
Stocks for Beginners

Top 2 Dividend Stocks for Beginners

Dividend stocks like BCE (TSX:BCE)(NYSE:BCE) are ideal for beginners.

Read more »

Technology
Stocks for Beginners

Starting an Investment Portfolio? Buy These 3 Stocks!

Interested in getting a start in the stock market? Buy these three stocks today!

Read more »

TFSA and coins
Stocks for Beginners

TFSA Investors: 3 Stocks You Should Buy Today

Are you looking for stocks to add to your TFSA? Here are three top stocks to buy today!

Read more »