Beginner Investors: 5 Top Canadian Stocks for 2024

New to investing and don’t know where to start? Here’s a five-stock Canadian portfolio that provides income, growth, and value.

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When you are new to investing, it can be hard to know where to start. Buying Canadian stocks in a volatile market can be terrifying.

However, it becomes a little less scary when you realize a stock is just an ownership stake in a real business. If you are looking for some really good businesses to own in 2024, here are five for any beginner portfolio.

A dividend anchor stock

Every investor should have a little bit of passive income in their portfolio. That way, when the market fluctuates, you can still earn a cash return. At the very least, it is a comfort to have one or two stable anchors in a portfolio. Fortis (TSX:FTS) can fill that role nicely.

FTS is not a growth stock. Though Fortis is growing by about double the normalized rate of inflation (around 4-6% per year). It provides essential gas and electric services across North America, so it is meant to be stable.

The electric utility holding company has strong assets, a well-managed balance sheet, and predictable growth. Fortis stock has grown its dividend for 50 consecutive years! FTS pays a 4.2% dividend yield today and should provide long-term stable returns.

A Canadian blue chip stock

Another blue chip every Canadian should have some exposure to is a Canadian railroad. Both Canadian National Railway and Canadian Pacific Kansas City Railway (TSX:CP) have been excellent long-term stocks.

Canadian Pacific is my preference today. After acquiring Kansas City Southern, it has become the only railroad network connecting Canada, the U.S., and Mexico. This gives it a significant competitive advantage and growth opportunity.

With near-shoring manufacturing an increasing trend, freight moving between the three nations is expected to continue rising. CPKC is very well positioned to benefit from this long-term trend. While it is not an exciting business, this railroad has delivered strong historic returns.

A growth stock

If you are looking for a Canadian stock with some higher growth potential, (TSXV:TOI) should be on your radar. Not many Canadians have heard of this company. That is largely because it only operates in Europe.

Constellation Software has been one of Canada’s best growth stocks. Topicus was spun out of Constellation and it is replicating its vertical market software consolidation across Europe.

Europe has many small software providers. Topicus has M&A (mergers and acquisitions), software development, and business operating expertise. It can combine these strengths to become a very profitable software consolidating juggernaut like its parent company.

A top Canadian tech stock

Descartes Systems (TSX:DSG) is another strong tech stock in Canada. The company operates a leading logistics network around the world. It also provides crucial software that makes transport and logistics businesses more efficient and profitable.

Descartes has a target to grow by 12-15% annually. It does this by making smart acquisitions and investing in an assortment of software businesses. The company has a great long-term growth record, a smart management team, a cash rich balance sheet, and extremely profitable services.

A small-cap stock with big potential

Propel Holdings (TSX:PRL) is a small-cap Canadian growth stock that is a bit higher risk, but also higher reward. Propel provides a proprietary lending platform that uses artificial intelligence to underwrite loans faster and more effectively than traditional methods.

The company caters loans to non-prime consumers that major banks generally reject. This is a higher risk category. However, Propel earns higher interest on its loans to compensate for the risks.

It has been growing rapidly and has considerable potential to expand its services by category and geography. Despite its growth, it is relatively cheap with a price-to-earnings ratio of only seven.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Robin Brown has positions in Constellation Software, Descartes Systems Group, Propel, and The Motley Fool has positions in and recommends Propel and The Motley Fool recommends Canadian National Railway, Canadian Pacific Kansas City, Constellation Software, Descartes Systems Group, and Fortis. The Motley Fool has a disclosure policy.

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