3 No-Brainer Stocks to Buy With $20 Right Now

Here are three no-brainer stocks that are suitable for anyone getting started on their investing journey.

| More on:

Gone are the days when you could only invest in stocks after you have saved up enough money to make your commission fee worthwhile. That’s because there are now commission-free trades available at Wealthsimple and National Bank of Canada.

There’s no excuse not to put your savings to work — however much you have saved up — even if it’s only $20. For example, if you’re able to save $20 a week towards your long-term investments, you would be investing $1,040 a year, which is a good start.

Let’s say you’re investing $20 a week, it would be a good idea to accumulate shares in stocks (driven by underlying businesses) that will grow their earnings, driving an increase in the value of the shares in the long run. You’d be employing a dollar-cost averaging strategy, in which you’re averaging your cost per share over time.

You can further increase the probability of your diversified portfolio increasing its value over time by putting your money in durable businesses that have high predictability in their earnings and pay out safe and growing dividends.

Here are three no-brainer stocks that are suitable for anyone getting started on their investing journey.

Fortis stock

Fortis (TSX:FTS) is a trustworthy blue-chip stock for investors to buy and hold. As one of the top Canadian utility stocks, it has increased its dividend for 50 consecutive years. Many retirees count on it for growing dividend income as a part of their diversified portfolios. Over the last 10 years, its dividend-growth rate was 6.3%.

The business is diversified across 10 regulated utilities in Canada, the United States, and the Caribbean. It consists primarily of transmission and distribution assets, serving 3.5 million electric and gas customers.

Currently, it has a $25 billion five-year capital plan through 2028 to grow its rate base at a compound annual growth rate (CAGR) of about 6%, which allows it to support healthy dividend growth of 4-6% per year in the period.

At $55.49 per share at writing, the utility stock is reasonably priced at a price-to-earnings (P/E) ratio of about 17.7 versus its long-term normal valuation of about 19.3 times earnings. At this quotation, Fortis also offers a decent dividend yield of 4.25%.

TD stock

Toronto-Dominion Bank (TSX:TD) stock also trades at a discount to its long-term normal valuation, as the stock has traded in a sideways range for a couple of years. The recent weakness in the Canadian bank stock was triggered by a money-laundering scandal. The stock bounced from the selloff, which suggests it was too cheap to ignore.

Certainly, for long-term investors, the bank stock offers good value. At $77.95 per share at writing, it trades at a P/E of about 10.1 and offers a nice dividend yield of 5.23%. As shown in the YCharts graph below, compared to its 10-year yield range, this is at the high end of the yield.

TD Dividend Yield Chart

TD Dividend Yield data by YCharts

Rogers Communications stock

Rogers Communications (TSX:RCI.B) is another dividend stock that seems to offer good value. At $54.27 per share, it trades at a P/E of about 11.6. As one of the big Canadian telecom companies, its earnings are typically resilient through the economic cycle. It’s anticipated to experience stable earnings growth over the next few years. So, on a forward basis, it looks even cheaper.

Normally, it should be able to trade at about 15 times earnings, which represents a target price of over $70 per share. Indeed, analysts also have a 12-month price target of north of $70. Across 11 analysts, the consensus price target shown on the TMX Group website at the moment is $72.13. This represents a meaningful discount of approximately 25%. The stock also offers a safe dividend yield of close to 3.7%.

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 Kay Ng has positions in Fortis, Rogers Communications, and Toronto-Dominion Bank. The Motley Fool recommends Fortis, Rogers Communications, and TMX Group. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Concept of multiple streams of income
Top TSX Stocks

The Best Stocks to Invest $1,000 in Right Now

Here are some of the best stocks that every investor should own today to generate massive income and strong growth…

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Dividend Stocks

Trump’s Tariffs Could Hurt Your TFSA – But These 2 Stocks Will Keep it Safe

Worried about tariffs coming down? Then consider these two stocks to keep your portfolio safe.

Read more »

concept of real estate evaluation
Dividend Stocks

3 Top Real Estate Sector Stocks for Canadian Investors in 2025 

The Canadian real estate sector could see modest growth in 2025, but its long-term secular demand remains intact.

Read more »

Dividend Stocks

Buy These 3 Canadian Stocks Before Tariffs Change the Game

These three dividend stocks offer security, growth -- you name it. No matter what tariffs come our way.

Read more »

data analyze research
Dividend Stocks

This 7.6% Dividend Stock Is a Must-Buy as Trump’s Tariffs Hit Canada

If there's one way to add some consistency to your portfolio, it's an investment in a passive-income powerhouse like this…

Read more »

protect, safe, trust
Dividend Stocks

Trump’s Tariffs Could Cause a Recession: This 1 Canadian Stock Can Protect Your Portfolio

If you're looking for security, consider the essentials during this period of volatility in the markets.

Read more »

Pile of Canadian dollar bills in various denominations
Dividend Stocks

Invest $20,000 in These 2 Canadian Stocks to Beat Trump’s Trade War

Are you looking for security during uncertain times? These two Canadian stocks offer it in spades.

Read more »

happy woman throws cash
Dividend Stocks

Billionaires Are Buying This Canadian Stock Before Trump’s Tariffs Shake the Market

This Canadian stock doesn't just have a shot at growth under tariffs, but for long-term investors it could be a…

Read more »