New to Investing? 3 Canadian Stocks to Buy Right Now

These Canadian stocks are all high-quality companies with excellent growth potential, making them three of the best to buy right now.

| More on:
Index funds

Image source: Getty Images

If you’re new to investing, you picked a great time to start. With all the market turmoil over the last year, right now is the best opportunity for investors to buy Canadian stocks in years.

It’s common for investors to become disconcerted as markets sell-off. However, if you are buying stocks for the long run and only investing money that you’ve earmarked for the long haul, and not cash you may need in the near term, then stock market sell-offs become some of the best opportunities for investors to buy stocks cheap that can earn you major returns for years to come.

When our hard-earned money is on the line, it’s not uncommon for investors to experience a myriad of emotions through the ups and downs of market movements.

However, if you can keep those emotions in check and focus on buying high-quality stocks and the long-term potential that investing offers, you can set yourself up for years of gains.

So with that in mind, if you’re looking for top Canadian stocks that you can buy right now while they are dirt cheap, here are three of the best to consider for your portfolio.

A top Canadian retail stock to buy undervalued right now

If you’re looking for high-quality stocks to buy now that are trading at a discount, one of the best to consider is Canadian Tire (TSX:CTC.A).

Canadian Tire has been trading undervalued for some time now as investors have been worried about the impacts the retail stock may face in this high-inflation environment.

However, as it has continued to perform well, something we also saw through the pandemic, Canadian Tire has been recovering in recent months, making it one of the top Canadian stocks to buy right now, before it gets any more expensive.

One of the biggest reasons it continues to perform well is that it has an impressive e-commerce platform, in addition to using data analytics and its ultra-popular loyalty program to help drive more foot traffic through its stores and ultimately grow its sales.

Today, it trades at a forward price-to-earnings ratio of just 10.1 times, down from its five-year average of 11.2 times. Furthermore, the stock also offers a dividend yield of 3.8%, as well as consistent dividend growth as it’s constantly increasing its earnings per share each year.

One of the best dividend stocks on the TSX

Another high-quality Canadian stock to buy right now is Freehold Royalties (TSX:FRU), especially if you’re a dividend investor looking to build a significant passive income stream.

Freehold Royalties is one of the best dividend stocks in the energy industry, as it owns the land that other energy stocks use to produce oil and gas. Therefore, it’s constantly earning tonnes of cash flow from these royalty payments, yet has minimal expenses itself. This business model is why it pays such a significant dividend that currently offers a yield of 7.3%.

It’s worth noting, though, that in the short term, Freehold can be volatile as oil prices fluctuate. However, while it may be volatile in the short term, the most important thing for investors is that its dividend remains intact.

And considering how much margin of safety the dividend has, with an expected payout ratio of just below 60% this year, it’s a high-quality stock that investors can have confidence buying and holding for years.

One of the best Canadian stocks to buy right now

Lastly is Brookfield Infrastructure Partners (TSX:BIP.UN), a stock that’s not as cheap as the other two, but it’s also highly defensive and can protect your capital in this uncertain environment.

Many investors will want to balance buying stocks that are cheap with reliable and defensive stocks, especially with so much uncertainty in markets as well as the economy today.

Therefore Brookfield, with its portfolio of defensive infrastructure assets all over the world, as well as its long-term growth strategy, is one of the best Canadian stocks to buy right now.

It’s constantly recycling capital to create more value for investors, can benefit from higher inflation, and pays an attractive distribution with a current yield of 4.6%. Management aims to increase this dividend by 5% to 9% every single year, making it one of the best Canadian stocks to buy now.

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 Daniel Da Costa has positions in Brookfield Infrastructure Partners and Freehold Royalties. The Motley Fool recommends Brookfield Infrastructure Partners and Freehold Royalties. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Businessperson's Hand Putting Coin In Piggybank
Dividend Stocks

How Much Can You Really Earn in Passive TFSA Income?

With a diversified portfolio of high yield stocks like Enbridge (TSX:ENB) you could potentially get up to $4,400 per year…

Read more »

data analyze research
Dividend Stocks

2 Stocks to Invest in a Sideways Economy

Not all stocks are equally vulnerable to the weak economy and market, and the right stable investments can help you…

Read more »

Value for money
Dividend Stocks

Why Canadian Investors Should Add This Value Stock to Their Portfolios

This value stock is down now, but this comes all from outside impacts. A year from now, you'll likely wish…

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

This 7.1% Dividend Stock Pays Serious Cash

After the pullback, Enbridge stock offers a compelling dividend yield of almost 7.1% It's a good consideration for passive income.

Read more »

stock research, analyze data
Dividend Stocks

3 TSX Stocks With Unbeatable Passive Income and Bargain Prices

Three TSX stocks trading at bargain prices are buying opportunities for their relatively safe and sustainable dividend payments.

Read more »

value for money
Dividend Stocks

3 Cheap Dividend Stocks Paying up to 10%

Income-seeking investors can consider buying shares of high-dividend stocks with monthly payouts, such as Slate Grocery REIT.

Read more »

Senior couple at the lake having a picnic
Dividend Stocks

Retirees: Here’s How to Boost Your CPP Pension

The CPP can only cover a portion of your daily expenses. Take control of your pension, and boost the $811…

Read more »

grow dividends
Dividend Stocks

Boost Your Passive Income With These 3 Cheap Dividend Stocks

Given their high yields and discounted stock prices, these three cheap dividend stocks could be an ideal buy to boost…

Read more »