The Best TSX Stocks to Invest $1,000 in April 2023

TSX stocks such as Waste Connections can help long-term investors derive market-beating gains in the upcoming decade.

| More on:
edit Colleagues chat over ketchup chips

Image credit: Photo by CIRA/.CA.

The most successful stock market investors are those who have brought shares of quality companies and held them for several years. This strategy allows investors to benefit from the power of compounding and generate exponential returns over time.

While the stock market is volatile in the near term, the asset class has helped investors derive inflation-beating returns over the last several decades. In an environment that is quite challenging, it’s essential to identify companies with strong underlying businesses that enjoy a wide economic moat.

Here are the three best TSX stocks for you to invest $1,000 in April 2023.

Canadian Natural Resources stock

Trading at an enterprise value of $100 billion, Canadian Natural Resources (TSX:CNQ) is a TSX giant which has already returned 281% to investors in dividend-adjusted gains since April 2013.

Despite these outsized gains, CNQ stock offers investors a tasty dividend yield of 4.5% and is priced at 10 times forward earnings, which is very cheap.

Canadian Natural Resources increased production in 2022 due to its strategic investments in natural gas assets, resulting in record natural gas production for the company.

An elevated pricing environment allowed Canadian Natural Resources to report adjusted funds low of $19.8 billion and free cash flow of $10.9 billion in 2022. Its share buybacks and dividends totaled more than $10 billion in the last four quarters.

Further, CNQ also paid a special dividend of $1.5 per share last August and is on track to pay dividends of $3.6 per share to shareholders in the next 12 months.

Waste Connections stock

A recession-resistant company growing at a fair clip, Waste Connections (TSX:WCN) should be on top of your shopping list in 2023. It provides non-hazardous waste collection, transfer, disposable, and resource recovery services in Canada and the United States. These collection services are offered to residential, municipal, commercial, and exploration & production customers.

Despite rising interest rates, Waste Connections is forecast to increase adjusted earnings from $5.13 per share in 2022 to $6.5 per share in 2024, showcasing that it enjoys pricing power.  

So, WCN stock is priced at 28.5 times forward earnings, which might be steep. But Bay Street expects the bottom line to expand by 14% annually in the next five years.

Waste Connections currently pays investors an annual dividend of $1.4 per share, translating to a forward yield of 0.8%. These payouts have more than doubled in the last two decades.

Well Health stock

The final TSX stock on my list is Well Health (TSX:WELL), which has already returned 4,600% to investors since its initial public offering in 2016. Currently trading 49% below record highs, Well Health stock is valued at a market cap of $1.1 billion.

Well Health reported record sales of $569 million in 2022 — an increase of 88% year over year. Its robust top-line growth enabled the company to increase adjusted earnings before interest, tax, depreciation, and amortization by 73% to $104.6 million.

In 2022, the company grew omni-channel patient visits by 50% in 2022 to 3.5 million, while total patient interactions were up 86% at 4.9 million.

Well Health expects sales in 2023 to range between $665 million and $675 million, indicating the TSX tech stock is priced at less than two times forward sales.

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 Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool recommends Canadian Natural Resources. The Motley Fool has a disclosure policy.

More on Dividend Stocks

stock research, analyze data
Dividend Stocks

How Much to Invest to Get $500 in Dividends Every Month

TSX dividend stocks such as Enbridge, TD Bank, and Telus, can help you earn $500 in monthly dividend payments.

Read more »

Golden crown on a red velvet background
Dividend Stocks

Dividend Powerhouses: Canadian Stocks to Fuel Your Portfolio

These two top Canadian dividend aristocrats are some of the top stocks on the TSX to buy now and hold…

Read more »

Dial moving from 4G to 5G
Dividend Stocks

This Undervalued Dividend Stock is Worth Buying Right Now

Want an undervalued dividend stock with long-term potential and a juicy yield? Here's an option you may regret not buying…

Read more »

A worker gives a business presentation.
Dividend Stocks

1 Stock I’m Buying Hand Over Fist in July Despite the Market’s Pessimism

This top dividend stock is going through a rough patch, but don't let that count out all the growth we've…

Read more »

person on phone leaning against outside wall with scenic view at airbnb rental property
Dividend Stocks

2 TSX Stocks Poised to Have a Big Summer

Restaurant Brands International (TSX:QSR) stock and another darling that could be too cheap to ignore this summer.

Read more »

HIGH VOLTAGE ELECRICITY TOWERS
Dividend Stocks

Forget Fortis Stock: Buy This Magnificent Utilities Stock Instead

Looking for high dividends and returns? Then I'm sorry, but Fortis (TSX:FTS) stock probably isn't for you.

Read more »

Increasing yield
Dividend Stocks

2 High-Yield (But Slightly Risky) Stocks to Keep Your Eye on

Have these top TSX dividend stocks finally bottomed?

Read more »

Target. Stand out from the crowd
Dividend Stocks

2 Dividend Stocks I’d Buy if They Fall a Bit

Any near-term decline in these two top Canadian dividend stocks will make them look even more attractive.

Read more »