3 Canadian Stocks Tailor-Made for Beginning Investors in 2024

There are some great options to buy now for beginning investors. Here are three stocks to buy today and hold for decades.

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Finding a perfect mix of diversified stocks can be a daunting task, particularly for new investors. Fortunately, the market gives us plenty of options to consider. Here are three stocks primed for beginning investors in 2024.

Start with the defensive king

One of the best stocks for beginning investors to consider is Fortis (TSX:FTS). Fortis is one of the largest utility stocks in North America. The $66 billion behemoth boasts ten operating regions across Canada, the U.S., and the Caribbean.

Across those segments, Fortis has 3.5 million utility customers, spanning both electric and gas units.

But what makes Fortis a great option for beginning investors in 2024? That comes down to the company’s lucrative business model. Fortis generates a stable and recurring revenue stream for providing utility services that is backed by regulated long-term contracts that can span decades.

This allows Fortis to invest in growth and pay a very generous dividend.

As of the time of writing, that dividend works out to 4.42%, making Fortis a great addition to any well-diversified portfolio. Fortis has also provided annual upticks to that dividend for 50 consecutive years.

That fact alone makes the stock a great option for beginning investors. Prospective investors not ready to draw on that income can reinvest it, allowing any investment to grow for what could be decades of stable growth.

Don’t forget Canada’s big banks

It would be impossible to compile a list of stocks for beginning investors and not mention at least one of Canada’s big banks. The bank for investors to look at now is Bank of Montreal (TSX:BMO).

BMO is the oldest of Canada’s big banks and, as a result, has an incredible history of paying out generous dividends that spans nearly two decades. That’s an incredible amount of time, spanning wars, unrest, and market volatility.

Today, that dividend pays out a generous 4.62%, making it a great option to buy and forget like Fortis.

Apart from its storied history and juicy yield, BMO offers prospective investors lucrative long-term growth appeal. The bank, like most of its peers, has turned to the U.S. market to seek international growth.

For BMO, that growth came to fruition with the acquisition of Bank of the West last year. The deal established BMO as one of the largest in the U.S., with a presence in 32 state markets.

Additionally, the deal added hundreds of new branches in new state markets and billions in loans and deposits.

Beginning investors: Generate a recurring income stream

One of the best ways to generate a recurring income stream is by owning a rental property. Unfortunately, the rising interest rates and white-hot market have priced out many would-be investors.

But rather than spend a cool $250,000 on a downpayment and still have to worry about a mortgage, property taxes and finding a tenant, there is another option.

RioCan Real Estate (TSX:REI.UN) is one of the largest real estate investment trusts (REITs) in Canada. The company boasts over 180 properties across Canada with a whopping 32.6 million square feet of leasable area.

Historically, RioCan has focused on retail and commercial properties for its portfolio, but in recent years, that mix has changed. Specifically, RioCan has added an increasing number of residential mixed-use properties into the mix, and that’s where an opportunity lies.

The properties, which RioCan calls RioCan Living, comprise residential towers that sit on top of several floors of retail. The buildings are situated in Canada’s major metro areas along major transit and commerce routes.

In other words, the properties are in high-demand areas and cater to the lack of available properties in metro areas.

But why should beginning investors consider RioCan right now, particularly compared with a traditional rental property?

In short, RioCan is a lower-risk, lower-upfront-cost way to generate a monthly income stream. The risk of investing is spread across hundreds of units, not one property. Additionally, there are no maintenance or tenant issues.

Finally, RioCan’s monthly distribution, which boasts a 6.04% yield, is both sustainable and attractive. By way of example, Investors who drop $40,000 into RioCan (less than a downpayment) will generate a monthly income of just over $200.

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 Demetris Afxentiou has positions in Fortis. The Motley Fool recommends Fortis. The Motley Fool has a disclosure policy.

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