Seasoned investors know that building out a well-diversified portfolio takes time, patience, and an understanding of where to invest. Fortunately, there’s no shortage of stellar Canadian stocks beginner investors should buy.
Here’s a look at some of those stocks to consider for your portfolio.
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Start with a strong defensive core
Beginner investors should buy one or more defensive stocks. This is because defensive stocks can offset some of the market volatility while continuing to provide some income and growth.
Utilities and telecoms are great examples of this. BCE (TSX:BCE), in particular, is one option that should be high on the list of any prospective investor.
BCE is one of the largest telecoms in Canada. Apart from the traditional bevy of subscription-based services, BCE also operates a massive media segment. That media arm blankets the country in radio and TV stations, which provide an additional revenue stream for the company.
Telecoms have always been defensive investments thanks in part to their stable subscriber base, and the massive infrastructure they have built. Since the pandemic started, the need for a fast and stable internet connection has increased that defensive appeal.
Throw in the insatiable demand for mobile data, and you have a superb buy-and-forget option that also offers a tasty quarterly dividend. As of the time of writing, that dividend works out to a tasty 6.04% yield.
If that’s not enough, prospective investors should also note that BCE has paid out dividends for well over a century without fail and provided an annual or better uptick to that dividend for over a decade.
Build out a solid income stream
BCE’s juicy dividend is great, but there are other stocks beginner investors should buy that offer an even more lucrative dividend. Enbridge (TSX:ENB) is one such option that most investors are familiar with.
Enbridge operates a massive pipeline network that provides the bulk of the company’s revenue. In fact, that pipeline network is the largest and most complex pipeline network on the planet.
In terms of volume, the pipeline network hauls a third of North American-produced crude making it another defensive gem to hold. And perhaps best of all, Enbridge doesn’t charge for the use of that network based on the volatile price of oil, making it another solid defensive pick to consider.
Apart from its impressive pipeline business, Enbridge also operates one of the largest utilities on the continent, as well as a growing renewable energy business. In other words, the company is not only a defensive pick but also a well-diversified pick.
Turning to income, Enbridge really impresses. The company boasts a quarterly dividend that carries a yield of 6.68%. This means that a $20,000 investment will generate income of just over $1,350 in the first year.
Finally, remember that Enbridge has provided an annual bump to that dividend for nearly three decades without fail.
Invest for the future
Renewable energy is one of the best long-term growth options available to investors right now. That’s because of the growing necessity for renewable energy coupled with the energy gap left by traditional fossil-fuel-burning utilities transitioning to renewables, often at a great expense.
Throw in a juicy and growing dividend and you have some great Canadian stocks beginner investors should buy. And one stock is TransAlta Renewables (TSX:RNW). TransAlta is one of the larger renewable energy companies in Canada, which also has a presence in the U.S. and Australia.
Collectively, the company boasts a portfolio of solar, wind, hydro, and gas facilities that are bound by the same long-term regulated contracts which make traditional utilities so appealing. In fact, many of TransAlta’s contracts extend well into the 2040s, making them great long-term picks.
That stability also means that TransAlta can provide a juicy dividend. As of the time of writing, that dividend works out to an insane 7.66% yield, which is distributed on a monthly cadence.
These are the stocks beginner investors should buy. Will you?
No investment is without risk, and that includes the stocks mentioned above. Fortunately, the above stocks are defensive picks that also offer growth and income-earning potential.
In my opinion, they should form a core part of any well-diversified portfolio.
