Are you looking for a few good stocks to buy with $500?
If so, you have plenty of options available to you. In general, it’s best to make the same kinds of investments with small sums of money that you’d make with large sums of money. With that said, there are some stocks you can’t buy with less than $500, so a restraint such as only having that much money is real. With that in mind, here are three high-quality stocks you can buy with $500 or less.
CN Railway
Canadian National Railway (TSX:CNR) is a Canadian railroad company that transports goods all over North America. It ships $250 billion worth of goods annually to locations in Canada and the United States.
CN Railway has been doing very well lately. Its last four earnings releases beat analyst expectations and generally showed positive year-over-year growth in revenue and earnings. In its most recent quarter, it delivered
- $4.3 billion in revenue, up 16.3%;
- $1.2 billion in net income, 32.9%;
- $1.82 in diluted earnings per share (EPS), up 38.9%; and
- $1.93 billion in operating income, up 28.6%.
It was a strong quarter. And since CN Railway has only one competitor in Canada and is economically indispensable, the company is likely to keep putting out strong quarters in the future.
Alimentation Couche-Tard
Alimentation Couche-Tard (TSX:ATD) is a Canadian gas station company best known for running the Circle K chain of stores. ATD bought Circle K, then a U.S. chain, from ConocoPhillips in the early 2000s. Later, it expanded the chain and brought it to Canada, taking over Irving gas stations and turning them into Circle K locations. The Circle K franchise turned out to be a big hit; stations are now a common sight in cities across the country.
Alimentation is well known for its long-term track record of success. Since 2010, its stock has risen about 2,000%, and its earnings have increased dramatically (though by less than the stock price has). ATD has been delivering good earnings lately, beating analysts’ estimates in two out of the last four quarters. In the most recent quarter, it delivered
- $16.24 billion in revenue, down 2%;
- $670 million in earnings, up 40%;
- $0.68 in diluted EPS, up 48%; and
- $908.9 million in operating income, up 36.6%.
It was a pretty strong quarter, and it beat analysts’ expectations. It was particularly impressive how ATD managed such strong earnings growth in a period when gas prices were declining, as gasoline sales are a big part of the company’s business.
TD Bank
Toronto-Dominion Bank (TSX:TD) is a Canadian bank stock that I have owned for several years. It is one of the faster-growing Canadian banks and the largest Canadian bank by total assets.
TD Bank stock is pretty cheap and extremely profitable. At today’s prices, it trades at 9.8 times earnings, 3.1 times sales and 1.39 times book value. Going by these metrics, the stock is fairly cheap. TD also has a 30% net margin and a 14% return on equity, so the company is highly profitable as well. When you have cheapness, profitability, and growth all in one package, your natural tendency is to buy. With TD Bank stock, that’s what I’ve done.
