So, you’ve decided to get into the stock market? Congrats! I think that’s one of the best decisions you could make. Taking control of your financial future could result in life-changing results. However, it’s very easy for new investors to get distracted by all of the moving parts associated with the stock market. In my opinion, beginners should keep things simple. Look for companies with businesses you understand and focus on those that lead their respective industries.
In this article, I’ll discuss three great Canadian stocks for beginners.
This is one of my favourite stocks
I would suggest that new investors consider Shopify (TSX: SHOP) for their portfolio. For those that are unfamiliar, this is one of the largest e-commerce companies in the world. It provides merchants of all sizes with a platform and many of the tools necessary to operate online stores. Shopify stands out from its peers due to its ability to everyone from first-time entrepreneurs to large-cap enterprises.
As it stands, Shopify stocks trades about 60% lower than its all-time high. However, I don’t think things are as bad as they look. In its first-quarter (Q1) 2023 earnings presentation, Shopify announced that it had generated US$1.5 billion in revenue for the period. That represents a 25% increase year over year. Of that revenue, US$116 million came from recurring sources. That represents a 10% increase over the same period last year. Institutional investors also agree that this stock is on the right track, pushing Shopify stock up more than 17% over the past week.
Consider this company for the future
Brookfield Renewable (TSX: BEP.UN) is another stock that beginners should consider buying today. This is one of the largest producers of renewable utilities in the world. As of this writing, Brookfield Renewable’s portfolio of facilities have a generation capacity of 25 gigawatts (GW). The company also has various construction projects underway — the completion of which would add another 110 GW of generation capacity, cementing this company as a leader within its industry.
Brookfield Renewable is an interesting stock to consider, because it offers investors great growth potential, while providing a stable dividend. In terms of growth, there’s no denying that renewable energy continues to increase in penetration around the world. As the demand for those services increases, companies like Brookfield Renewable should continue to grow. In terms of its dividend, Brookfield is a very attractive stock. The company has raised its distribution in each of the past 11 years at a rate of 6%.
A stock for risk averse individuals
I’ll admit, there’s quite a bit of risk involved with the two stocks mentioned previously. For example, with Shopify, investors need to keep in mind all of its competitors. The e-commerce industry is a cutthroat space, and even though Shopify is one of the biggest players today, it’s not impossible for one of its competitors to start offering a product that far surpasses Shopify’s abilities.
If you’re looking for a safer pick, then I’d suggest consider Bank of Nova Scotia (TSX: BNS). This is one of Canada’s largest banks. What stands out about this company, for me, is its dedication to international growth. By focusing on emerging regions like the Pacific Alliance, Bank of Nova Scotia puts itself in great position to grow in the future. As a bonus, this stock has been paying its shareholders a dividend for nearly 190 years. If that’s not enough incentive to get you interested in this stock, I don’t know what would be.
