Investing can be a very rewarding journey. However, for new investors, it can seem like a very daunting task. There’s so much information to take in and so many different ways you can take your portfolio. In this article, I’ll try to make things a bit easier for beginners by highlighting five outstanding Canadian stocks to consider buying in April.
Start with one of the Canadian banks
In my opinion, all investors, new or experienced, should buy one of the Canadian banks. This is because the Canadian banking industry is highly regulated. That makes it difficult for newer competitors to displace the industry leaders. Of the Big Five banks, Bank of Nova Scotia (TSX: BNS) stands out to me. Its business is highly diversified with a particular focus on the Pacific Alliance.
In addition to its large international presence, Bank of Nova Scotia could be attractive to investors due to the dividend it offers. Bank of Nova Scotia has been paying shareholders a portion of its earnings for nearly 190 years. As of this writing, the stock offers a forward dividend yield of 6.06%.
If you’re interested in dividends, choose this stock
Speaking of dividends, new investors should take note of Fortis (TSX: FTS). This is a utilities company that serves more than three million customers across Canada, the United States, and the Caribbean. Fortis has made a name for itself over the years due to its excellent record of increasing its dividend distribution. In fact, its 49-year dividend-growth streak is the second-longest active streak in the country. Fortis has already announced its plans to continue raising its dividend through to 2027 at a rate of 4-6%.
You should be familiar with this company
Beginner investors should also turn to Canadian National Railway (TSX: CNR) as a potential position in their portfolio. This is likely one of the most recognizable companies in the country, as it operates nearly 33,000km of track. Canadian National’s rail network spans from British Columbia to Nova Scotia and as far south as Louisiana.
Canadian National has done an excellent job of growing its dividend over the past 26 years. Over that period, Canadian National’s dividend has increased at a compound annual growth rate of nearly 16%. Being one of North America’s largest railway companies, I’m confident that Canadian National could continue its financial dominance in the coming years.
Here’s a stock to consider for growth
The three stocks mentioned previously all cater to those that are more conservative with their money. While they could generate stable returns over the next few years, those returns generally won’t be anything that gets a new investor excited. Fortunately, companies like Constellation Software (TSX: CSU) exist.
This company acquires vertical market software (VMS) businesses, then provides the coaching and resources required to turn those acquisitions into exceptional business units. Over the years, Constellation Software has managed to perfect its strategy, and that’s been reflected in its stock price. Since its initial public offering in 2006, Constellation Software stock has gained more than 14,000%.
If you’re still having trouble
Although stock picking could allow an investor to beat the market, it’s perfectly reasonable for new investors to stick with exchange-traded funds (ETFs). Essentially, these are a curated basket of stocks that track an index. If I could only suggest one ETF for new investors to consider buying in April, it’d be Vanguard S&P 500 ETF (TSX: VFV).
By holding this ETF in your portfolio, investors will gain exposure to some of the biggest companies in the world. That includes the likes of Amazon, Apple, Visa, Coca-Cola, and more. The reason an ETF like this one would be a good idea for new investors is that it spreads your risk across a large number of companies. This could help your portfolio increase stability, allowing you to get used to the daily fluctuations that you should expect to see in a stock portfolio.
