Beginner investors should insist on simplicity and stability over complexity and hard-to-understand momentum plays that are tough to value. Indeed, the time-tested blue chips may not enrich you over a near-term timespan (think just a few weeks or months), but they can help you build wealth over the years and decades while steering clear of potential risks that could set back your retirement portfolio by months or even years.
Indeed, if you can side-step truly devastating risks (think stocks that can shed more than 75% of their value in a hurry), new investors can likely do well over the long haul. Indeed, recessions are bound to happen on your multi-decade investment journey.
However, if you don’t chase momentum and stick with stocks that are cheaper than their true worth, the odds of irrecoverable plunges can be lowered. So, as a beginner, you should strive to achieve a relatively decent return over time without having to bear massive risks. By being mindful of the risks with the overvalued, overheated stocks, investors can stay in the game through all sorts of bear markets.
Going into February, stocks are looking up again. And though some of the bears out there are calling for a cooling off of various parts of the market, I still think new investors have a lot to love with some of the cheaper dividend dynamos. In this piece, we’ll check out two that may make for terrific starter stocks that look quite attractive right here.
Metro
First up, we have shares of Quebec-based grocery retail play Metro (TSX: MRU), which stands out as an intriguing value option to play a potentially rocky year for stocks. Now, Metro isn’t just another grocer to batten down the hatches ahead of a potential economic downturn.
It’s a very well-run retailer with a dominant position in its markets of interest. Undoubtedly, if you live on the West Coast, you’ve probably never heard of the relatively small regional grocery firm ($16.3 billion market cap at the time of writing).
Still, I think the stock offers defensive exposure at a pretty reasonable price of admission, with shares going for just $71 and change per share. At 16.37 times trailing price to earnings (P/E) alongside a 1.7% dividend yield, I consider MRU to be one of the best defensive stocks for new investors looking to play defence for 2024. Shares haven’t done a heck of a lot over the past two years, rising by just shy of 5%. That said, the 0.04 beta is one of the top reasons (aside from the modest valuation) to hang onto shares, given it’s far less likely to be correlated to the broader market.
Quebecor
Sticking with the theme of Quebec, we have the regional telecom firm Quebecor (TSX: QBR.B), which is one of my favourite “growth” telecoms to own for the next 10 years. The company seems quite ambitious as it looks to grow outside of its home territory (primarily Quebec).
With an excellent management team that knows how to balance risks, I view Quebecor as a Canadian gem that could grow its dividend (yielding 3.62% right now) by a considerable amount over the next 15 years.
At 11.91 times trailing P/E, shares look like more of a deep-value play than a firm with a compelling opportunity to give Canada’s telecom heavyweights a run for their money. For now, QBR.B stock is more of an off-the-radar play. In any case, I view it as a great dividend dynamo for any long-term-focused investor.
