Got $1,500? You Can Confidently Add These 3 Stocks to Your Portfolio

If you have some money to invest, you can invest it confidently in Royal Bank of Canada stock.

| More on:
Canadian Dollars

Image source: Getty Images

If you have $1,500 to invest, you have many options for places to invest it. One good option would be to invest it in index funds, which are among the least risky stock investments you can make. Index funds reduce your risk by “spreading your eggs across many baskets,” thereby limiting your exposure to any one potential corporate catastrophe. They also tend to deliver good returns over time.

That doesn’t mean that investing in individual stocks is pointless. To the contrary, if you want to have any chance at outperforming the index without using leverage, individual stocks are practically mandatory. In this article, I will explore three individual stocks that you could invest $1,500 into. Of course, you should always bear in mind the importance of diversification; the Motley Fool generally recommends 25 stocks minimum. The three in this article could be good additions to a portfolio, but do not constitute an adequately diversified portfolio in themselves.

Suncor Energy

Suncor Energy Inc (TSX:SU) is a TSX energy stock that has a 4.35% dividend yield. The stock has done well over the last year, rising 13.6%.

Suncor is well known throughout Canada. It operates the popular gas station chain, Petro Canada. It also has some business exporting petroleum products to the United States.

One thing Suncor has going for it right now is a very cheap valuation. At today’s prices, Suncor trades at:

  • 5.6 times earnings
  • 1.1 times sales
  • 1.6 times book value
  • 4 times operating cash flow

This stock is very cheap, going by last year’s earnings anyway. Oil prices aren’t as high now as they were for most of 2022, so Suncor’s 2023 earnings are likely to decline somewhat. However, when you look at Suncor’s aggressive debt repayment, it’s possible that its earnings won’t decline as much as oil prices would predict.

Royal Bank

Royal Bank of Canada (TSX:RY) is a great Canadian bank stock. The company is about 170 years old, making it the second oldest bank in Canada. Canadian banks are doing well this year thanks to the bank of Canada’s interest rate hikes. In its most recent quarter, RY delivered a 4% increase in adjusted earnings. Its GAAP earnings (earnings including non-recurring and irregular items calculated by official accounting rules), went down 19%, but that was mainly due to some tax changes and the Canada Recovery Dividend. On the whole, looking at the factors that are likely to recur into the future, Royal Bank put a half-decent quarter behind it. Nevertheless, the stock is pretty cheap, trading at just 11.6 times earnings and sporting a 4% dividend yield. Not a bad value if you ask me.

Alimentation Couche-Tard

Alimentation Couche-Tard Inc (TSX:ATD) is a Canadian convenience store company. The retailer has significantly expanded over the years. It brought the Circle K chain to Canada by buying it from ConocoPhillips in the 2000s. Later, ATD expanded Circle K by buying out Irving gas stations. Today, ATD makes money off of fuel sales, as well as sales of chips, cigarettes, lottery tickets, and other such things inside of its stores. It got a big boost in fuel sales in 2022 thanks to the high oil prices that prevailed that year. It should do reasonably well this year, though maybe not as good as last year.

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 Andrew Button has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alimentation Couche-Tard. The Motley Fool has a disclosure policy.

More on Energy Stocks

energy industry
Energy Stocks

A TSX Dividend Giant I’d Buy Over Suncor Stock Right Now

Here's why Canadian Natural Resources stock is a much better bet compared to Suncor stock in March 2023.

Read more »

stock research, analyze data
Energy Stocks

Better Buy in April 2023: Bank Stocks or Energy Stocks?

Bank stocks and energy stocks are some of the most sought-after assets, but which is the better buy heading into…

Read more »

grow dividends
Energy Stocks

TSX Energy Index Down 6.6%: How to Take Advantage of the Sell-Off

Investors can focus on generating passive income from three high-yield energy stocks while waiting for oil demand and prices to…

Read more »

Man data analyze
Dividend Stocks

Got $5,000? Buy These 2 Stocks and Hold Until Retirement

If you have $5,000 to invest, here are two TSX stocks you can buy and hold as part of your…

Read more »

Oil pumps against sunset
Energy Stocks

Better Buy: Suncor Stock or Enbridge?

Energy stocks are under pressure. Is Suncor or Enbridge now oversold?

Read more »

Increasing yield
Energy Stocks

Buy the Dip: 1 Blue-Chip Energy Stock With a Rising Dividend Yield

Suncor Energy (TSX:SU) stock is approaching deep-value territory, making it a top pick for Canadian value and income investors.

Read more »

oil and natural gas
Energy Stocks

Could Cenovus Energy Stock Hit $30 This Year?

Should you buy Cenovus Energy stock now?

Read more »

Oil pipes in an oil field
Energy Stocks

3 High-Yield Energy Stocks to Earn Passive Income for Years

High-dividend-paying TSX stocks such as Enbridge and two others offer investors the opportunity to generate passive income in 2023.

Read more »