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.
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.