Investing in individual Canadian stocks can seem daunting. When you watch the business news, you can be lambasted with everything from macro-economic predictions to complex trading strategies. While investing can be complex, it can also be simple.
When you buy an individual stock, you buy a share in a real business. Good businesses steadily grow revenues, earnings per share, and cash flows.
In the near-term stock fluctuations occur for a variety of reasons (and at times even without explanation). However, over long periods of time, stocks follow the profit trends in a business.
If long-term investing sits well with you, here are three top stocks to consider buying if you are a new investor.
Alimentation Couche-Tard stock: A great global brand with more growth ahead
Alimentation Couche-Tard (TSX: ATD) is a great Canadian stock for beginners because its products and services are readily available across Canada. It operates over 16,000 gas stations and convenience stores across the world through its Circle K, Couche-Tard, and Ingo brands.
This company has demonstrated an intriguing combination of acquisition and organic growth. It just announced a major acquisition in Europe that could be a platform in the region.
Likewise, the company has made several tuck-ins that expand its presence in the huge U.S. market. The convenience sector remains very fragmented, so it still has ample acquisition opportunities.
In terms of organic growth, the company is expanding its array of products and services at its sites. Couche-Tard earns higher margins from its in-store consumable options. Food remains an important profitability driver ahead.
The company is very shareholder friendly. Its founder and chairman is one of the largest shareholders. As a result, management’s interests are very aligned to deliver long-term shareholder value.
FirstService: An acquirer with a big market
Another Canadian stock that is ideal for beginners is FirstService (TSX: FSV). It manages 8,700 residential communities in Canada and the U.S. It also has several leading branded companies in the home renovation, improvement, and restoration segment.
The residential business provides an annuity like stream of recurring income. However, the branded portfolio provides significant growth. Most of these market segments are fragmented, which allows for significant consolidation opportunities.
FirstService’ business can be cyclical in the near-term. However, on a longer trajectory, the company has delivered strong returns. Over the past five years, it has increased revenues and adjusted earnings per share by a respective compounded annual growth rate of 15.8% and 12%, respectively.
This stock is almost never cheap. However, it is worth paying up for its high-quality management team, resilient business, and steady growth platform.
Calian Group stock: Growth, income, and value
One final Canadian stock beginners should consider for the long-term is Calian Group (TSX: CGY). Unlike the two stocks above, it is not a very visible business to the public.
It provides essential services focused on healthcare, training, cybersecurity, and specialized technologies. Its customers are a split of government, private businesses, and institutions. This compilation of high-quality clients helps ensure a reliable stream of revenues.
The company has made several smart acquisitions that have expanded its service, technology, and geographic reach. The company is on a journey to hit $1 billion in revenues over the next few years.
After a few large acquisitions last year, it expects strong double-digit growth in 2024. Yet, it trades at half the valuation of many other well-known consolidators. It also pays a 2% dividend. For value, growth, and income, Calian looks to be an intriguing stock beginners can buy today.
