Investors planning to invest a portion of their savings into stocks could consider investing in the shares of companies that continue to deliver solid financials regardless of market conditions. Thankfully, the TSX has several companies with strong fundamentals that have consistently performed well and are poised to deliver attractive returns.
So, if you can spare $500, you can confidently invest in these five Canadian stocks to outperform the broader equity market.
Canadian National Railway
Canadian National Railway (TSX: CNR) stock is a no-brainer to generate worry-free capital gains and add safety to your portfolio. The leading transportation company is a trade enabler, transporting multi-million tons of products throughout North America. Thus, its services are deemed essential for the economy.
Thanks to its defensive business model and well-diversified portfolio, it generates substantial revenues. Moreover, the railway’s focus on improving operational efficiency supports earnings growth. CNR stock has grown at a CAGR (compound annual growth rate) of over 13% in the past decade. Moreover, management is focused on returning cash to shareholders through higher dividend payments. Canadian National Railway’s dividend grew at a CAGR of 15% in the last 27 years. Good growth prospects and solid dividend payments make it a compelling growth and income stock.
Telus
The services of telecom company Telus (TSX: T) are deemed essential. The company consistently delivers profitable growth and enhances its shareholders’ returns through higher payouts. The telecom’s growing customer base, resilient average revenue per user, and lower churn provide a solid base for future growth. Moreover, the top three 5G provider’s focus on advancing its PureFibre footprint and 5G coverage augurs well for growth.
T stock has returned more than $1 billion in dividends in the first half of 2023. Moreover, it has paid its shareholders about $18.6 billion in dividends since 2004. Telus is well-positioned to deliver solid growth and enhance its investors’ returns through higher dividend payments under its multi-year dividend growth program.
goeasy
From telecom, let’s move to financial services. goeasy (TSX: GSY) could be a great addition to your portfolio within the financial services space. The subprime lender consistently generates solid revenue and earnings led by higher loan originations, stable credit and payment performance, and operating leverage.
In the past decade, its sales and earnings have grown at a CAGR of 17.7% and 29.5%, respectively. Moreover, GSY stock has increased its dividend for nine consecutive years. Looking ahead, higher loan volumes, steady credit performance, and a growing earnings base position the lender well to deliver compelling returns to its shareholders.
Loblaw
Canada’s largest food and pharmacy retailer, Loblaw (TSX: L), is another attractive stock to add to your portfolio. Its low-risk business model, large scale, focus on value pricing, and wide range of product offerings drive its traffic and revenues regardless of the economic situation. Moreover, the grocery chain’s focus on optimizing its retail network and productivity improvement cushions its bottom line.
Loblaw is poised to deliver steady growth as it continues to attract value-conscious consumers to its stores. Its discount stores offer low-priced private-label brands, which augurs well for growth. Further, strategic procurement and a focus on the modernization and automation of its supply chain will likely support its earnings growth.
Brookfield Renewable Partners
The final stock on this list is Brookfield Renewable Partners (TSX: BEP.UN). The growing adoption of clean energy and Brookfield’s large installed capacity position it well to deliver solid returns. The company also benefits from its highly contracted business and long-term agreements adding stability to its revenue and cash flows.
Brookfield Renewable Partners’ robust development pipeline and low operating costs will support its revenue and earnings growth and could drive its stock price higher. Moreover, the company will continue to enhance its shareholders’ returns through higher dividend payments.
