For anyone not currently invested in the stock market, now may be a wise time to change that. The S&P/TSX Composite Index has surged close to 5% over the past month and is nearing all-time highs that were set in late 2021. The Canadian stock market is showing signs that it’s eager to start a new bull run.
With interest rate hikes on hold and inflation finally showing signs of cooling off, it’s not all that surprising to see the strong performance in the stock market over the past month. That being said, I’m not expecting volatility to slow down just yet.
There’s still plenty of short-term uncertainty in the economy, which is exactly what investors don’t want to hear. But for long-term investors, a little volatility is no reason to be on the sidelines.
I’ve put together a list of three top Canadian companies that long-term investors can confidently buy today. Through thick and thin, these are three TSX stocks you can count on.
Royal Bank of Canada
Unlike the banking sector in the U.S., the Canadian banks have been among the most dependable areas of the stock market for Canadians in recent decades.
Stability and passive income are two reasons why any long-term investor would want to own one of the Big Five banks.
At a market cap of $180 billion, Royal Bank of Canada (TSX: RY) is Canada’s largest bank and an excellent company to own no matter the market conditions. It’s far from the fastest-growing stock on the TSX, but it’s one you can count on during inevitable volatile market periods.
Not only can the bank add defensiveness to a portfolio, but it can also be a significant income generator.
At today’s stock price, the bank’s dividend is yielding 4%.
Constellation Software
At a stock price above $2,000, Constellation Software (TSX: CSU) isn’t the most affordable company to own for new investors. But for those willing to pay up, there’s a lot to like about this market-beating tech stock.
Over the past five- and 10-year periods, not many stocks have outperformed Constellation Software. Growth has slowed in recent years, but shares are still up close to 200% over the past five years. In comparison, the Canadian stock market has returned just over 30%.
In comparison to any of the Canadian banks, Constellation Software will understandably be a more volatile holding. But for investors looking to earn market-beating returns, there aren’t many more dependable options on the TSX than this tech company.
Northland Power
Last on my list is the best of both worlds between RBC and Constellation Software. Northland Power (TSX: NPI) offers investors the chance to both earn a top dividend and market-beating growth returns.
The energy company’s dividend is yielding an impressive 3.5% at today’s stock price. In addition to that, shares are up a market-beating 50% over the past five years.
Shares are currently down about 30% from all-time highs. If you’ve had a renewable energy stock on your watch list, now’s the time to be investing.
