5 Canadian Stocks for Beginners in 2023

Looking to start building wealth in 2023? Here’s a simple portfolio of five top Canadian stocks for income, value, and growth.

| More on:
Dollar symbol and Canadian flag on keyboard

Image source: Getty Images

Are you new to Canadian stock market investing and looking for a place to start in 2023? If you can afford to take a long-term approach (five years or more), here is a simple five-stock portfolio that could help get you started.

Top dividend stocks

New investors tend to find dividend stocks a comfort, especially when markets are volatile. At the very least you get a tangible cash dividend return, even if the stock price declines. A great place to start is Canadian bank and utility stocks.

One of Canada’s largest banks is Toronto-Dominion Bank (TSX:TD). It has a leading retail banking franchise across Canada and the eastern United States. TD has compounded returns at a nearly 10% annual rate for the past decade.

While banks can be economically sensitive, TD has a strong balance sheet and a nearly market leading capital ratio. Last year, it announced two substantial acquisitions in the United States. These could start to pay off in solid earnings growth in the next few years.

In the meantime, TD trades with 4.4% dividend yield. Likewise, its valuation is reasonable with a price-to-earnings (P/E) ratio of 9.5. For a safe long-term hold, TD is a great place to start.

If you value dividend reliability, Fortis (TSX:FTS) is a Canadian utility stock to own. In fact, Fortis has increased its dividend annually for 49 years straight! Not many other Canadian stocks have such an impressive track record.

Fortis operates several regulated transmission and distribution utilities across North America. These tend to capture very consistent earnings that are backed by regulated contracts. Fortis has a solid balance sheet with most of its debt being fixed, long dated, and staggered.

This Canadian stock pays a 4.17% dividend yield. It has a $22.3 billion capital plan that should help grow the business by around 6% a year, and dividend growth will likely follow that at 4-6% a year.

Top Canadian value stock

If you want a cheap growth stock, Brookfield Corporation (TSX:BN) is an intriguing stock to hold. It owns stakes in a wide array of investment franchises in renewable power, infrastructure, real estate, private equity, specialized debt, insurance, and asset management.

It has compounded annual returns by around 15% for the past decade. Today, its business is larger and more diversified than ever, yet it trades at a large discount to the sum of its parts.

Its management team own a large stake in the business, so they are highly incentivized to bridge this gap. Be patient with this stock and shareholders could be amply rewarded.

Growth stocks

Given the stability in the dividend stocks above, it is wise to have some Canadian stocks with a little bit more growth as well. Two that look well positioned for the long term are Aritzia (TSX:ATZ) and BRP (TSX:DOO).

Aritzia has become a premium clothing retailer in Canada. It is only in the early innings of its growth journey in the United States. The company has a founder-led chairman with a high insider stake, a lot of cash on the balance sheet, and a prudent growth strategy. While it is not the cheapest stock, it has a large foreseeable growth trajectory if it can keep executing smartly.

BRP is perhaps a bit more cyclical but cheap in comparison. Despite being a leading manufacturer of innovative recreational vehicles, it only trades for 11 times earnings. It has grown revenues and earnings per share by compounded annual rates of 15% and 19%, respectively.

The company has been aggressively buying back stock, and that always favours long-term stockholders. Take a long approach, and this stock should reward.

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 Robin Brown has positions in Aritzia, Brookfield, and Brp. The Motley Fool has positions in and recommends Aritzia. The Motley Fool recommends Brookfield, Brookfield Corporation, Brp, and Fortis. The Motley Fool has a disclosure policy.

More on Stocks for Beginners

Target. Stand out from the crowd
Stocks for Beginners

3 Must-Buy TSX Stocks for Anyone New to Investing

Are you new to investing? These three TSX stocks for income, value, and growth are must-buys for any Canadian investor…

Read more »

grow dividends
Stocks for Beginners

After the Spinoff, Brookfield Stock Rose 16% in January

Brookfield stock is a wonderful business with a track record of delivering annualized returns of over 16%. And it's cheap…

Read more »

Woman has an idea
Stocks for Beginners

Just Starting to Invest? 3 Smart Stocks to Buy in February 2023

If you're looking for smart beginner stocks to buy, you could look into asset management companies like Brookfield Asset Management…

Read more »

edit Business accounting concept, Business man using calculator with computer laptop, budget and loan paper in office.
Dividend Stocks

How to Generate $500 in Tax-Free Passive Income Per Month

While the stock market is unpredictable, you can make a calculated investment and get a fixed passive income under a…

Read more »

stock analysis
Stocks for Beginners

The Biggest Market Movers on the TSX in January 2023

Here are the top Canadian stocks that drove the main TSX index up over 7% in January 2023.

Read more »

calculate and analyze stock
Stocks for Beginners

The Top 3 Most Shorted Stocks in Canada Today

These TSX stocks may be up now, but short-sellers are betting they're about to tumble in the next few weeks.

Read more »

Growth from coins
Stocks for Beginners

Got $5,000? These 2 Growth Stocks Are Smart Buys

Are you looking for some smart buys for your portfolio? Here are two great options to buy now while you…

Read more »

Young woman sat at laptop by a window
Stocks for Beginners

3 Stocks Beginners Can Buy in 2023 and Hold for Decades

Are you looking for a simple portfolio to get started as an investor? These three stocks are top performers and…

Read more »