No stock is an ideal buy in every market, but there are a few stocks you can buy confidently in every market. They may be worthwhile as short-term holdings, and once the trend you spotted is gone, you can exit the position. Or they may be worthy of long-term holdings. If you lean more towards the latter, there are five stocks that you might consider buying with your $500 capital.
An iron ore company
Champion Iron (TSX: CIA) is an Australian company operating and listed in Canada. It mines high-grade iron ore, and all three flagship projects are in Canada (two in Quebec). The seven exploration projects are in Canada as well.
Champion Iron’s stock is vulnerable to iron demand and supply cycles, as an iron ore company. But so far, the stock has mostly gone up since its inception. It has risen by over 461% in the past five years alone. Assuming the stock continues its growth pattern and you hold it long term, it can be a credit to your portfolio.
The mining stock also offers dividends, but if you don’t invest enough capital in the company, the payouts might not be sizable enough to be a considerable factor.
A fuel cell company
Ballard Power Systems (TSX: BLDP) can be a powerful pick if you are interested in investing in green stocks. The company makes fuel cells that convert hydrogen into electricity and offers fuel-cell-based solutions for zero-emission vehicles and the power needs of various industries. The company already has a decent client portfolio.
The problem that Ballard Power Systems is facing right now is that despite being a very practical and innovative solution, it’s highly reliant on a resource for which there is no adequate infrastructure right now: hydrogen. Still, the stock managed to offer exceptional returns in a highly optimistic market and may do so again in the right market, so buying it now, at a highly discounted price, is a smart thing to do.
A rental company
With a price-to-earnings ratio of just 2.8, Tricon Residential (TSX: TCN) is one of the most undervalued stocks in the real estate sector right now. It’s a rental company operating in both Canada and the U.S., with a portfolio of roughly 36,000 single-family homes. The company prides itself on offering an exceptional rental experience.
Tricon stock is currently trading at a 45% discount. It started its recovery journey with the market and may follow the upward trend again when it returns. Capitalizing on that trend for maximum returns and locking in a good yield (considering the stock’s history) would require moving in on the stock when it’s still heavily discounted.
A renewable energy company
If ESG (environmental, social, and governance) investing is a priority for you, then a renewable energy stock like Brookfield Renewable Partners (TSX: BEP.UN) may be an amazing pick for your $500. The company has a massive portfolio of renewable energy assets in multiple countries. This includes wind, solar, hydro, storage, and distribution solutions.
Brookfield Renewable is a trusted name with a globally diversified portfolio of assets and a modest history of returns (275%) in the last decade (including dividends). This makes it a compelling pick, especially at its currently discounted price. With its 42% discount, the stock can double the capital you invest in it by surpassing its last peak by a small margin.
A food-retailing company
Food is an evergreen business. Even if the country is in a recession, food-related businesses, like Sobeys and its holding entity Empire (TSX: EMP.A), don’t suffer as aggressively as companies from some other sectors. This is reflected in the trajectory of the stock for the past two decades.
Apart from a massive dip between 2015 and 2017, the stock has mostly gone up. Sobeys is not its only business, and a real estate investment trust (REIT) is also part of the corporate mix, but the REIT mostly rents out its properties to Sobeys, so the overall business model is highly dependent on food retailing. The stock has returned over 100% to its investors in the last decade.
Foolish takeaway
The five stocks can help your $500 grow at a decent pace. You can choose to divert all of the available capital in one of the companies or split it five ways, investing $100 in each company.
