3 Stocks to Buy if They Take a Dip

Here are three stocks to buy for investors seeking exposure to high-quality Canadian stocks that may trade at a discount on future dips.

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Some investors wait for stock prices to dip so that they can invest in a higher number of shares of such companies. This is an excellent way to buy stocks of high-value companies at bargain prices.

Accordingly, for those in patient wait-and-see mode, here are three stocks to consider. 

Shopify

Shopify (TSX:SHOP) is a global e-commerce platform which has its headquarters in Ontario. As of the company’s most recent earnings report, fourth quarter (Q4) of 2022 revenue came in with impressive year-over-year growth of 26%.

One might think that would be reason enough to buy SHOP stock here. However, Shopify has been among the hardest-hit stocks last year, as investors looked to diversify away from high-growth names to more defensive options.

That said, Shopify’s figures are starting to look much better. The company’s quarterly gross merchandise value was more than US$60 billion, while the figures for the entire year stood at US$197 billion. Additionally, revenue from subscription solutions reached US$400.3 million, showing a 14% increase from last year.   

If Shopify continues to post impressive numbers such as these, it’s likely this stock could grow into its valuation, which remains high but is looking much more attractive of late.

Fortis

Fortis (TSX:FTS) is an electricity and natural gas utility provider that distributes energy to 3.4 million customers in the U.S., the Caribbean and Canada. In 2022, the company reported net earnings of US$1.3 billion, which amounts to US$2.78 for each common share. Its annual earnings per share growth stood at 7%, which took the company’s adjusted net earnings per common share to US$2.78. 

Fortis remains a stalwart stock long-term dividend investors continue to focus on. That’s because the company’s 3.9% dividend yield is overshadowed by its nearly five-decade-long streak of dividend hikes. If Fortis continues this trend, investors who buy FTS stock today will realize a much higher yield over time.

Fortis remains among the best defensive dividend stocks in the market. This is one to put on the shopping list for any dips in the future.

Toronto-Dominion Bank

Toronto-Dominion Bank (TSX:TD) is an international financial services provider that primarily operates in Canada and the United States of America. It has three segments: Wholesale Banking, Canadian Retail, and U.S. Retail. Like the other names on this list, the bank has recorded an excellent performance in Q1 2023. 

TD brought in adjusted earnings per share of $2.23, beating both last year’s digits of $2.08 and the average analyst estimate of $2.20. In terms of net income, TD’s Canadian division reported 7% growth, while the U.S. branches reported 25% growth. 

As a diversified way to play the banking sector (which is under turmoil right now), TD stock is among the safest bets in this sector known for its high returns. Investors looking for stocks to buy on a dip may want to consider TD stock, given the fact it’s already down substantially this 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 Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Shopify. The Motley Fool recommends Fortis. The Motley Fool has a disclosure policy.

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