How diversified is your portfolio? New investors often struggle to find that perfect diversified mix of stocks. Fortunately, the market gives us plenty of choice, including some stellar Canadian stocks for beginners.
Here’s a look at fives stocks to consider buying this April.
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Stock #1 – The defensive gem
At the heart of every well-diversified portfolio is one or more defensive stocks that can weather a volatile market. And that stock for investors to consider is Fortis (TSX:FTS).
Fortis is one of the largest utilities on the continent. And utilities boast one of the most stable business models anywhere, which should appeal to any long-term investor. In short, Fortis provides utility service that is backed by long-term regulated contracts.
For as long as Fortis provides that service, it generates a stable and recurring revenue stream. That revenue stream provides growth potential and a handsome dividend.
As of the time of writing, that dividend works out to a respectable 3.80%.
Stock #2 – The discounted bank
It would be hard to compile a list of great Canadian stocks for beginners and not mention one of Canada’s big banks. The banks boast superb growth, a juicy dividend and perhaps most importantly, an ability to rebound during slowdowns.
It’s that potential that leads us to Canadian Imperial Bank of Commerce (TSX:CM). CIBC lacks the international presence of its peers, which it compensates for with a larger domestic mortgage book. That exposure has resulted in CIBC dropping nearly 20% over the trailing 12-month period.
That handily puts the bank into discount territory, but that’s not all investors should consider. CIBC underwent a stock split last year. Stock splits don’t create value, but they do lower the cost of entry, which could be a game changer for new investors.
Factor in a juicy yield of 5.87% on its quarterly dividend, and you have one of the must-have Canadian stocks for beginners.
Stock #3 – The REIT that can replace a property rental
Prospective would-be landlords continue to sit out of the real estate market thanks to surging mortgage rates. Apart from the rates, a massive downpayment and other factors such as taxes, repairs, and finding (and keeping) tenants are also concerns.
Fortunately, RioCan Real Estate (TSX:REI.UN) can offer a lower risk alternative to taking out a mortgage. RioCan is one of the largest REITs in Canada, with a growing portfolio of commercial retail and mixed-use residential properties. Those residential properties are situated in high-traffic, high-demand areas of Canada’s metros.
What this means for investors is that RioCan can provide a recurring long-term income stream like a property, but without the mortgage and with much lower risk.
And like a rental property, RioCan pays its distributions out on a monthly basis. As of the time of writing, the yield on that distribution works out to an appetizing 5.06%.
Stock #4 – Renewable Energy
One of the biggest opportunities on the market right now is in renewable energy. TransAlta Renewables (TSX:RNW) is a growing renewable energy company with a presence in Canada, the U.S., and Australia.
TransAlta’s facilities adhere to the same stable business model that its fossil-fuel burning peers follow. In short, a recurring revenue stream backed by very long-term regulated contracts.
That stability allows TransAlta to invest in growth and pay out a juicy monthly dividend. As of the time of writing, that dividend works out to an insane 7.51% yield.
Stock #5 – The Retailer
Rounding out the list of Canadian stocks for beginners is Canadian Tire Corporation (TSX:CTC.A). Canadian Tire is one of the largest and most well-known retailers in Canada. Apart from its namesake brand, the company also boasts several other prominent brands across different verticals.
Canadian Tire differs from many of its traditional brick-and-mortar retailer peers. The company has embraced technology as part of its selling process, and established one of the largest rewards brands in Canada.
Both have helped the company forge ahead with impressive results. Those results have also helped the company continue to pay out its impressive dividend. As of the time of writing, that dividend works out to 3.82%.
