The stock market has a plethora of options you could consider. Each stock offers different things. There are dividend stocks whose stock price doesn’t grow much, but you get a quarterly payout. There are growth stocks — some that give stable growth and some that are volatile. There is one rule for every stock: buy the dip and sell the rally.
Five top Canadian stocks for new investors
Not all stocks trading at their lows may be a buy. You need to know the business risk and have at least one reason to believe the stock can grow in the future.
Growth stocks to buy in 2024
Air Canada (TSX: AC) stock is trading near its pandemic low at around $18, despite reversing its 2022 net loss of $1.7 billion to $2.27 billion net profit in 2023. The airline also reduced its net debt to $4.56 billion. However, the airline industry is a capital-intensive one with thin margins. The passenger volume growth has normalized.
However, it is now facing higher salary expenses as it hires more employees and increases salaries for pilots. The airline could enjoy the summer season traffic of leisure travellers, increasing the stock price above $23. However, it faces resistance at $26 as the company has too many shares in the market, which means more bifurcation of profits. If you are looking for short-term gains, $18.24 is a good entry point and $23-$24 is a good exit point.
Dye & Durham (TSX: DND) is a practice management software that made its debut in the stock market in July 2020. It went through peaks and troughs and is back to where it started. The software company initially adopted a strategy of growing through acquisitions but has now hit a pause on it to reduce the $1.36 billion debt. Last year, two of its acquisitions — Link and TM Group — fell apart, pulling the stock down to its all-time low of $7.46 in October 2023.
However, the end of the acquisition freed up resources for the company to focus on organic growth, and the stock recovered to above $15. The company now looks to reduce debt and grow through new product launches and a refreshed go-to-market strategy. It is looking to diversify its exposure beyond real estate into other verticals. A recovery in real estate and interest rate cuts could drive the stock to $30 and above in two to three years.
Dividend stocks to buy in 2024
Growth stocks are volatile, and you can reduce this risk by diversifying your portfolio toward dividend stocks.
TC Energy (TSX: TRP) builds and operates oil and gas pipelines and passes on the toll collected for transmitting oil and gas to shareholders. It is spinning off its oil pipelines business into a separate entity to work more efficiently on its gas pipelines. It is also divesting non-core assets and using the proceeds to reduce debt to 4.75 times its earnings before interest, taxes, depreciation, and amortization.
TC Energy divested $5.3 billion worth of assets in 2023 and plans to divest another $3 billion this year. It also plans to bring $7 billion worth of projects into service. This restructuring could keep dividend growth slow at 3% till 2026 and probably accelerate it to 5% from 2027 onwards.
The stock is trading 16% below its cyclical high. You can lock in a 7% dividend yield by investing now.
Brookfield Renewable Partners (TSX: BEP.UN) could be a good diversification into renewable energy. This stock can give you capital growth and dividends as the company increases its electricity generation capacity. It has 134 gigawatts of projects in the pipeline. Every new project that comes online comes with a new cash flow stream. The stock is closer to its 52-week low, creating an opportunity to lock in a 6.46% dividend yield.
You can invest a small amount in Hive Digital Technologies to take advantage of Bitcoin’s price fluctuation in 2024.
