It’s essential that investors diversify their portfolios. Doing so could help you find stability during turbulent market periods, much like we’re seeing today. However, when investors think of diversification, they tend to only think about investing in different sectors. Investors should also think of geographic diversification, as not every economy tends to experience the exact same economic cycles.
Luckily, Canadians have the ability to invest in American companies. By investing in companies that operate south of the border, Canadians have the opportunity to seek more stability and greater growth potential. In this article, I’ll discuss three no-brainer U.S. stocks that Canadian investors should buy today.
This consumer tech giant should be your first stop
If someone asked me what company I would choose as the safest U.S. stock to invest in, I’d probably say Apple (NASDAQ: AAPL). The reason I’d say that is because of the massive market share that Apple has established within its industry. It’s estimated that Apple holds a 23% share of the smartphone market. In addition, it’s estimated that more people are using Apple products than ever before, with more than one billion active iPhone users alone.
In the company’s most recent earnings presentation, it reported a 2% year-over-year growth in its third-quarter (Q3) revenue. Although that revenue growth may not be very impressive, it’s important to keep in mind that consumer spending is down tremendously this year. Despite that, I don’t expect to see Apple experiencing any difficulties sustaining its business. The company has more than US$27 billion of cash on its balance sheet, which should allow it to continue operating smoothly until consumer spending picks up again.
You may not know how big this company is
If you’ve never looked into the company, you may not know just how big Procter & Gamble (NYSE: PG) actually is. This company owns many different brands including Bounty, Gilette, Oral-B, Pampers, and Tide. Altogether, Procter & Gamble’s portfolio consists of more than 60 brands. That breadth in Procter & Gamble’s product line is what initially drew me to this company when I first started investing. In fact, investors may be interested to know that Procter & Gamble was the first stock I ever owned.
Like the other companies listed in this article, Procter and Gamble is an excellent dividend stock. The company has managed to increase its dividend distribution in each of the past 66 years. That gives it a longer dividend-growth streak than any stock listed on the TSX. Given the importance of the products that this company sells in our day-to-day lives, I expect Procter and Gamble to continue generating massive amounts of cash to fuel that dividend in the future.
Invest in one of Warren Buffett’s favourite companies
Coca-Cola (NYSE: KO) may be one of the most well-known brands in the world. It’s estimated that the company holds a 45% share of the global soft drink market. What many investors may not know, however, is that Coca-Cola is one of Warren Buffett’s favourite stocks. Berkshire Hathaway, the holding company led by Buffett, holds 400 million shares of Coca-Cola stock. Buffett has also stated on numerous occasions that he doesn’t see Berkshire Hathaway selling any of those shares in the foreseeable future.
So, what makes this company such an attractive investment? First of all, the company itself is very diversified. It sells more than just soft drinks. Coca-Cola also produces and sells sports drinks, juices, and water, among many other types of drinks. Because of the popularity of Coca-Cola’s beverages, the company has been able to build up a massive pile of cash. Some of that excess cash is distributed to investors in the form of a dividend. With a 60-year dividend-growth streak, Coca-Cola stands as one of the top dividend stocks in the world.
