It can take time to build up a well-diversified portfolio of individual stocks. If you can start with four to five companies right off the bat, that will go a long way to limiting the impact of volatility as you gradually add more holdings to your portfolio.
With that in mind, I’ve put together a list of five top Canadian stocks. All five companies differ from one another, making it a great basket to build a portfolio around.
Shopify
This high-growth tech stock will likely be the most volatile of the five, but there’s loads of upside to get excited about.
Shopify (TSX: SHOP) has crushed the market’s returns over the past five years, returning close to 250% to its shareholders. That’s even with shares trading more than 50% below all-time highs from late 2021.
Don’t miss your chance to load up on one of the top tech stocks at a bargain price.
Royal Bank of Canada
Investors who plan on owning high-growth companies like Shopify should consider how they’ll balance that risk in their portfolios. While Shopify can generate a ton of growth, the stock is also very susceptible to dramatic price swings.
Royal Bank of Canada (TSX: RY) is a perfect company to balance out a stock like Shopify.
Canada’s largest bank can provide a mix of both defensiveness and passive income. It won’t be the most exciting stock to own, but it will be a dependable one.
Air Canada
Canada’s largest airline, Air Canada (TSX: AC), is priced at an opportunistic discount right now. The airline stock continues to trade far below pre-pandemic levels. Shares have managed to climb above their 2020 lows but have struggled to gain much momentum over the past several years.
Air Canada is one of the few North American airline stocks with a track record of delivering market-beating returns.
Patience will likely be required for this pick, so buyer beware. But if you’ve got a long-term time horizon, this value play deserves serious consideration.
Fortis
You can never have enough dependable dividend-paying companies in an investment portfolio.
Fortis (TSX: FTS) provides a similar offering to RBC. The utility stock is a defensive stalwart that can keep volatility to a minimum. In addition, it can be a meaningful passive-income generator, too.
At today’s stock price, Fortis’s dividend is yielding a very respectable 4%.
Brookfield Renewable Partners
There are several very good reasons to have this beaten-down renewable energy stock on your radar.
First off, Brookfield Renewable Partners (TSX: BEP.UN) is trading at a discount that’s hard to ignore. As the renewable energy sector as a whole has been on a skid since early 2021, so too have the stock prices of many industry leaders.
Excluding dividends, Brookfield Renewable Partners is down close to 50% since the beginning of 2021. Even so, shares are close to on par with the broader Canadian market’s returns over the past five years.
In addition to a bargain price and a market-beating track record, the dividend yield is sky-high. Due largely to the recent selloff, the yield is at a whopping 6.5% at today’s price.
