New to Investing? 3 Top Canadian Stocks to Buy for Long Term

Here are top Canadian stocks to buy in the new year.

| More on:
Dollar symbol and Canadian flag on keyboard

Image source: Getty Images

If you plan to begin do-it-yourself investing this year, this article is for you. Even if markets look gloomy ahead of 2023, this should still not postpone your investment decisions. There are value opportunities in almost all kinds of markets. And we are in the middle of a bear market. So, here is a rundown of Canadian stocks that will likely play well in the long term.

Tourmaline Oil

Canada’s largest natural gas producer Tourmaline Oil (TSX:TOU) has created massive shareholder value in the last few years. TOU stock returned 75% in 2022, notably outperforming peer TSX energy stocks. Notably, although with such a handsome gain, TOU stock looks appealing from a valuation standpoint.

After a blockbuster 2022, Tourmaline looks well-positioned to delight investors next year. As per the company guidance, Canada’s biggest gas producer is expected to earn free cash flows of $3.7 billion in 2023. This will likely be enough for capital expenditure, debt repayments, and shareholder dividends in 2023.

Natural gas has notably outperformed crude oil this year. Due to Europe’s energy crisis, gas might continue to trade at elevated levels in the short to medium term. Tourmaline could be some of the biggest beneficiaries of that, notably boosting its earnings. It’s scale and low-cost infrastructure in the quality production base should play well in the long term.

Fortis

If you are looking for stable dividends, Fortis (TSX:FTS) is one classic bet. It’s less-volatile stock, along with consistently increasing dividends, make it an attractive bet for conservative investors. FTS has underperformed broader markets this year amid the rate-hike cycle. However, when the cycle slows or inverts, utility stocks like Fortis will likely turn much higher.

Utilities earn stable revenues from regulated operations, facilitating stable dividends. Fortis has grown its earnings below average in the last few decades. And that’s passable for utilities because they offer stability. However, it has raised its dividend for the last 49 consecutive years. Stable capital appreciation and dividends have outperformed broader markets in the last decade.

But note that utility stocks are not for everyone. Investors seeking higher returns with a higher risk appetite might disdain FTS. But those valuing stability more than higher returns could prefer Fortis.

goeasy

Canadian consumer lender goeasy (TSX:GSY) is one of the top wealth creators on the TSX. It has returned more than 12,000% in the last two decades, thrashing TSX stocks at large. To be precise, $10,000 invested in 2000 would be worth close to $2 million at the end of 2021.

The company lends to non-prime borrowers. It caters to a huge addressable market, which is not catered to by conventional banks. Lending, that too in a non-prime segment, is a risky business. However, goeasy’s strong execution and prudent underwriting boded well for its business and earnings growth.

GSY stock has been terribly weak, losing 40% in 2022. The fall was quite on the expected lines with adamant inflation and recession woes. However, its business has continued to grow this year, despite aggressive rate hikes. The stock might turn around once the macro picture changes course next year. goeasy looks fundamentally attractive for the long term. The stock is now even more attractive after a steep correction.

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.

The Motley Fool recommends Fortis. The Motley Fool has a disclosure policy. Fool contributor Vineet Kulkarni has no position in any of the stocks mentioned.

More on Stocks for Beginners

eat food
Stocks for Beginners

Hungry? These 3 Food Stocks Are Hard to Ignore

Food stocks are some of the best long-term investments on the market. Here are three options that are hard to…

Read more »

A worker uses a laptop inside a restaurant.
Stocks for Beginners

Stubborn Interest Rates: 2 TSX Stocks That Can Play Along (and Even Win)

Higher interest rates are actually good for these stocks. They trade at good valuations and provide nice dividends.

Read more »

Tired or stressed businessman sitting on the walkway in panic digital stock market financial background
Stocks for Beginners

Buying These 2 Stocks Is a Good Way to Hedge Against a Falling Market

Investors looking to hedge against a stock downturn should consider these two stocks as viable long-term picks.

Read more »

Dollar symbol and Canadian flag on keyboard
Stocks for Beginners

2 Canadian Stocks I’ll Be Buying Hand Over Fist in 2023

There are some great Canadian stocks on sale right now. Here's a duo of companies I'm buying that you may…

Read more »

Women's fashion boutique Aritzia is a top stock to buy in September 2022.
Stocks for Beginners

Has ATZ Stock Bottomed Out?

Has ATZ stock finally bottomed out after losing nearly 10% of its value in 2022? Let’s find out.

Read more »

Stocks for Beginners

4 Top Value Stocks to Buy in February 2023

Not only are all these value stocks worth considering, each is growing significantly on the TSX today!

Read more »

Couple relaxing on a beach in front of a sunset
Stocks for Beginners

3 Stocks That Could Help You Retire a Millionaire

Looking for some stocks that can help you retire rich? Here are three buy-and-forget options that will do the trick.

Read more »

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 »