New-age brokers such as Wealthsimple allow you to buy fractional shares. So, if you have $250 to invest but want to buy a stock priced at $1,000, Wealthsimple offers you the chance to buy partial shares, making the investing process more inclusive.
Wealthsimple is among the most popular investing platforms in Canada, especially for millennials. Equipped with an easy-to-use platform, Wealthsimple makes it convenient for investors to invest in equities with a low amount of capital.
Here are three stocks Wealthsimple investors can buy and hold forever.
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Constellation Software stock
Priced at $2,785 per share, Constellation Software (TSX: CSU) is the most expensive stock on the TSX. However, the TSX stock has delivered game-changing returns to shareholders. CSU stock went public in May 2006 and has since returned over 15,000% to shareholders in the last 17 years.
You can buy fractional shares of Constellation Software on Wealthsimple, enabling you to diversify your portfolio with a small amount of capital. For instance, you can own 10% of one CSU stock by investing just $278.5.
Constellation Software provides mission-critical software solutions to enterprises, due to which it enjoys higher customer retention rates. Valued at a market cap of $60 billion, analysts expect CSU to increase revenue by 20.4% to $10.85 billion in 2023 and by 16.7% to $12.7 billion in 2024.
Priced at 35 times forward earnings, CSU stock is forecast to expand adjusted earnings by 40% annually in the next five years.
Apple stock
The largest publicly listed company in the world, Apple (NASDAQ: AAPL) is valued at a market cap of more than US$3 trillion. The iPhone still accounts for a majority of Apple’s sales, but the tech giant has successfully diversified its revenue base over the years.
It ended the March quarter with US$166 billion of cash and generated US$111 billion of free cash flow in fiscal 2022 (which ended in September). This provides the company with enough resources to reinvest in research and development and launch disruptive products consistently.
Apple has created its own ecosystem, which it has monetized successfully. Priced at 36 times forward sales, AAPL stock may seem expensive. But it would be a mistake to ignore the world’s most popular brand due to its steep valuation.
TMX Group stock
The final Wealthsimple stock on my list is TMX Group (TSX: X), a company that has increased revenue from $807 million in 2019 to $1.11 billion in 2022. The TMX Group operates several exchanges, such as the TSX, the TSX Venture Exchange, and Trayport. It also offers clearing facilities, depository services, tech solutions, and other services.
Despite lower trading volumes in recent months, TMX reported revenue of $306 million in the first quarter of 2023, an increase of 7% year over year.
Priced at 20 times forward earnings, TMX Group is trading at a reasonable multiple. It also offers shareholders a dividend yield of 2.4%, making it attractive to income-seeking investors.
TMX stock has outpaced the broader markets in recent years. It has returned 340% to shareholders, after adjusting for dividends, since August 2013. In this period, the TSX index has surged 128%.
