Investing can be a very daunting task. For many, looking for and choosing the right stocks to hold in a portfolio can be very difficult. However, it doesn’t have to be as tough as you think. In fact, in most cases, keeping it simple is the best thing to do. When looking for stocks to hold in a portfolio, look for companies that have a predictable source of revenue and lead their respective industries. Consulting a list of blue-chip stocks could set you on the right path.
Here are three “keep it simple” stocks to buy today.
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Buy one of the banks
If you look at the Canadian economy, it’s clear that banks are a very important piece of the pie. In fact, if you were to look at an exchange-traded fund (ETF) of the S&P/TSX Index, you’d see that banks and financial companies make up more than 30% of the fund. That’s a staggering number, considering that there are 10 different sectors that make up those index ETFs.
In addition, four of the nine largest companies in Canada are banking companies. With that in mind, it only makes sense for investors, new and experienced, to invest in bank stocks.
If I could only pick one bank stock, it would be Bank of Nova Scotia (TSX:BNS). This company stands out among its peers, because of the outstanding geographic diversification present within its business. Notably, Bank of Nova Scotia has established itself as a strong competitor within the Pacific Alliance. This gives the company a great opportunity to grow. For dividend investors, you may be happy to hear that Bank of Nova Scotia has managed to pay its shareholders a portion of its earnings in each of the past 189 years.
Invest in utility companies
Utility companies could also make a great addition to your portfolio. That’s because these businesses tend to receive revenue on a recurring basis. That gives companies like Fortis (TSX:FTS) a very predictable source of revenue, allowing them to generate stable dividends over long periods.
In fact, Fortis is known for offering one of the best dividends in Canada. As of this writing, the company has managed to increase its dividend distribution in each of the past 49 years. Fortis aims to continue increasing its dividend at a compound annual growth rate (CAGR) of 4-6% through to at least 2027. That gives investors a chance to build a source of passive income that can compete with the long-term inflation rate.
Consider this top stock
Finally, investors should consider buying shares of Canadian National Railway (TSX:CNR). This company is one of the largest players in the North American railway industry. It operates nearly 33,000 km of track which spans from British Columbia to Nova Scotia and as far south as Louisiana.
Canadian National stock has been very notable this year due to its performance. So far this year, the TSX has lost about 6% of its value. Certain stocks, like those that are growth oriented have lost more than 50% of their value. Canadian National is unique in that it has actually gained about 10% this year. That puts it ahead of many stocks available on the market. With that kind of market-beating potential, Canadian National is definitely a stock worth buying today.
