If you are new to investing, hometown Canadian stocks are a great place to start. Your home turf is the best place to invest, because it is likely full of companies that you already know and appreciate.
Great investors like Peter Lynch have famously encouraged investors to go out and find products and services you love, find what company they come from, and then see if that’s an intriguing stock.
Fortunately, there are plenty of great Canadian companies for beginners in your in backyard. Here are four Canadian stocks that are great for any new investor.
Alimentation Couche-Tard: Canada’s hidden retailer
Whenever I need to fill up with gas or buy a cold slushie, I find myself often heading to Circle K. Well, if I did a bit of digging, I would find that Circle K is owned by Alimentation Couche-Tard (TSX:ATD).
This Quebec-based convenience store retailer has delivered an exceptional 634% total return over the past 10 years. It has compounded its earnings per share by 19% annually over that time.
Couche-Tard has been very good at making smart acquisitions at very good prices. This Canadian stock just announced a substantial acquisition in Europe, which should be very accretive long term. Despite rising 10% this year, it doesn’t trade at a demanding valuation. Take a long-term time horizon, and this stock could seriously reward.
Aritzia: A Canadian growth stock at a fair price
Speaking about retail, one shop my wife cannot seem to stop shopping at is Aritzia (TSX:ATZ). This Vancouver-based retailer offers “Everyday Luxury” branded clothing, primarily for women.
It dominates this niche category in Canada, and it has been gaining strong traction in the United States — so much so that when it opens a new boutique, it can earn a cash pay back in 18 months or less (in many instances).
Despite this Canadian stock recently falling 17%, it is up 222% over the past five years. In that time, it has compounded normalized earnings per share by around 22% a year. Given the current economic worries, this stock has pulled back and is trading at its cheapest valuation in the past three years.
Two top Canadian stocks for dividends
The two above are more growth stocks, but if you want to earn some passive income, Fortis (TSX:FTS) and TELUS (TSX:T) are staples.
Fortis provides services that homes and businesses can’t live without. It operates 10 energy transmission and distribution utilities across North America.
This Canadian stock is about as defensive as you can get with nearly 50 years of consecutive annual dividend increases. Today, it pays a 4% dividend yield and is likely to keep growing its payout for years ahead.
TELUS is one of Canada’s largest telecom providers. Whether you like it or not, everyone needs internet and cell coverage just as much as electricity and water. Consequently, TELUS earns predictable and growing earnings.
Over the past three years, TELUS has led its sector in customer and earnings growth. It has grown its dividend by around 7.9% annually for the past 10 years.
The company is finishing a large capital-spending cycle. When that slows, it should reap an outsized amount of cash that should go to shareholders in some nice dividend increases. This Canadian stock trades with a 5.15% dividend yield, and it looks like a decent value today.
The Foolish takeaway
You don’t need to look far away to find stocks in great quality companies. Canada is full of many great growth and income stocks that might be right in front of your eyes. Take the time to get to know these great businesses, and the reward can be exceptional.
