2 Top Canadian Stocks I’ll Buy Hand Over Fist This Month

A combination of a well-established, blue-chip stock and one high-growth stock can deliver stellar shareholder returns over the long term.

| More on:
edit Person using calculator next to charts and graphs

Image source: Getty Images.

Stock investing is a risk-and-reward activity, although financial success depends mainly on your choices. Since most investors understand the inherent market risks, they mitigate them by diversifying or choosing companies from different sectors.

Enbridge (TSX:ENB), an energy stock, and Alithya Group (TSX:ALYA), which is in the rebounding tech sector, are an ideal combination today. The former is a blue-chip company and a well-established dividend payer, while the latter is a promising high-growth stock or multi-bagger. The pair could deliver stellar returns to shareholders over the long term.

Market mover

Trading volume is one of the handy tools for making investment decisions, and other traders look at volume to determine liquidity. Enbridge is a perennial volume leader on the TSX, which indicates the energy stock is a market mover. The Dividend Aristocrat trades at $52.38 per share (+0.62% year to date).

The $106 billion energy infrastructure company is a superstar in the eyes of long-term investors, including retirees. Besides its dividend-growth streak of 28 years, the dividend yield is mouth watering (6.73%). The recent increase in quarterly dividends was 3.2%.

Enbridge’s total return of 54,826.52% in 47.16 years translates to a compound annual growth rate (CAGR) of 14.31%. The energy giant boasts four blue-chip franchises and a diversified low-risk pipeline utility model. Its legacy assets enable management to maintain a strong balance sheet and financial flexibility.

The business model is resilient as ever because of the cost of service/contracted cash flows (98%). For the full year 2022, the adjusted earnings and cash provided by operating activities increased 2.5% and 21.3% year over year to $5.7 billion and $11.2 billion. Furthermore, the $18 billion secured capital program provides visibility to future growth.

Increasing scale and scope

This year, the information technology sector is the second-best performer thus far, with a 15.44% gain. Many of its constituents, including Alithya, are on the rebound. At only $2.30 per share, the small-cap stock is up 13.30% year to date, with market analysts forecasting a return potential between 54.7% and 80.1% in one year.  

The $218.64 million, growth-oriented company offers digital technology and software engineering services, such as business strategies, enterprise cloud solutions, application services, and data & analytics. Its customers are companies in various sectors, including governments.

Management reported strong year-over-year revenue growth, improving gross margins and earnings before interest, taxes, depreciation, and amortization in the third quarter (Q3) of fiscal 2023. In the three months that ended December 31, 2022, revenues increased 19.2% to $130.78 million versus Q3 fiscal 2022. However, the net loss widened 57.9% year over year to $5.5 million due to increased business acquisition, integration, and reorganization costs.

Its president and chief executive officer Paul Raymond said the company delivered improvements on many important fronts during the quarter, despite global uncertainties. Alithya has the scale and scope to leverage its geographies, expertise, and integrated offerings. The primary goal is to capture the fastest-growing IT services segments and lead digital transformation.

Balanced approach

Enbridge and Alithya are excellent options for investors looking for a balanced in portfolio. You have a top-notch passive-income provider with a low-risk profile and a tech stock with a high growth potential. Consider taking positions in both this month.

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 Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Dividend Stocks

Better Buy for TFSA Passive Income: Telus Stock or TD Bank?

Telus stock and TD stock look cheap today. Is one really oversold?

Read more »

funds, money, nest egg
Dividend Stocks

Income Stocks: A Once-in-a-Decade Chance to Get Rich

As a part of your diversified investment portfolio, solid dividend stocks on sale can help you get rich with growing…

Read more »

Hourglass projecting a dollar sign as shadow
Dividend Stocks

2 Superb TSX Stocks to Buy for Passive Income

All dividend stocks can help you start a passive-income stream, but relatively few offer a healthy combination of yield and…

Read more »

A golden egg in a nest
Dividend Stocks

TFSA Investors: 2 Growth Stocks to Build an Adequate Nest Egg

Two TSX growth stocks are ideal holdings for TFSA investors building a nest egg or retirement wealth.

Read more »

financial freedom sign
Dividend Stocks

How to Easily Make $1 Million in 20 Years

There's trying to time the market, and then there's the easy way of investing if you want to make $1…

Read more »

Dividend Stocks

Top TSX Stocks to Buy to Prepare for a Recession

Here are two TSX stocks to consider that could offer immense portfolio stability in an economic downturn.   

Read more »

A worker uses a double monitor computer screen in an office.
Dividend Stocks

2 of the Best Canadian Stocks That Pay Out Monthly

These two Canadian dividend stocks are some of the best to buy, offering yields upwards of 5.4% and returning cash…

Read more »

clock time
Dividend Stocks

How Investors Can Build a $1 Million Portfolio in 12 Years

If you can handle it, you can certainly create a million-dollar portfolio in just 12 years, especially considering this dividend…

Read more »