Canadian investors can use their Tax-Free Savings Account (TFSA) to make investments anywhere in the world. And they should. The more diversified your portfolio the better, and that includes on a global scale. But did you know that means you can also invest in U.S. stocks?
Not only should you be finding stocks that offer a diversified, global portfolio, but you also can choose U.S. stocks as well. Not every U.S. company is on the TSX, so make sure you’re not missing out on opportunities by investing only in Canada!
With that in mind, here are four no-brainer U.S. stocks Canadian investors should consider.
United States Steel
Among U.S. stocks, United States Steel (NYSE:X) is a strong choice in this rebounding economy. Steel is a good option for those seeking the safety of commodities. And with a US$5.7-billion market capitalization, this company is a stellar option.
The company offers Canadian investors access to high-strength steel as well. This is what’s used by automakers, construction, energy and other industries that need lighter-weight vehicles. Furthermore, it offers diversification by operating not only in the U.S., but also in Europe.
Yet the company is a steal (pardon the pun) among U.S. stocks, trading at just 1.4 times earnings as of writing. Shares are up 1.9% year to date, and 39% in the last month.
Annaly Capital Management
Asset managers are another alternative for Canadian investors seeking exposure to U.S. stocks. And one of the best out there is Annaly Capital Management (NYSE:NLY). The company operates as a real estate investment trust, seeking to deliver attractive returns from its investments in the mortgage finance sector, while also providing cash through investing in real estate.
Quarter after quarter the company has blown past earnings estimates, and recently announced a public offering of 100 million shares of common stock. And yet the company remains a bargain among U.S. stocks, trading at just 2.7 times earnings, offering a whopping 12.9% dividend yield!
Shares of the company are up 12% in the last month, and down 8% year to date.
Now, if you’re looking for U.S. stocks that offer substantial growth, Hexcel (NYSE:HXL) is a great option. This industrial company manufacturers materials used in aerospace, industrial, and defense operations. These are long-term contracts that aren’t going to simply disappear even with a market downturn. So you get a defensive stock as well.
Hexcel has been one of the top growers not only in the last year, but in the last few decades. Management remains consistent on performance, even in the face of inflation. During the company’s latest earnings report, Hexcel reported adjusted diluted earnings per share of US$0.33, up from US$0.08 the year before. Sales increased as well from US$320 million to US$393 million, allowing the company to reaffirm its 2022 guidance.
Now it’s not cheap, trading at 59.5 times earnings among U.S. stocks. However, it has proven that it can perform over the years. Shares are up 21% in the last month, 25% year to date, and a whopping 1,745% in the last two decades.
Frankly, Walt Disney (NYSE:DIS) is one of those companies that doesn’t seem like it will ever disappear. The company rolls with the shifting environment, remaining one of the top entertainment choices for consumers and investors alike. Today, the company offers one of the best streaming services, new content, and the rights to the biggest titles in movies and television.
These attractive offerings are reflected in its share price. While Disney trades at a high 80.9 times earnings, it’s still working its way back up to pre-fall prices. Shares are up 35% in the last month alone, but still down 20% year to date. DIS has the panache of a tech stock after all. But given that it has been on the market so long, and shares are still down, I’d recommend long-term Canadian investors pick up Disney for the long haul alongside other U.S. stocks.