3 of the Best Stocks to Buy Right Now in Canada

These three Canadian stocks are an excellent addition to your portfolios in this volatile environment.

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The Canadian equity markets have started this month on a weak note, with the S&P/TSX Composite Index falling 0.7% yesterday. The lower-than-expected first-quarter GDP (gross domestic product) numbers and weak manufacturing data from the United States raised concerns over global economic growth. The cooling down of oil prices has also weighed on the Canadian equity markets. Amid the growing volatility, you can buy the following three Canadian stocks to strengthen your portfolios.

Fortis

Fortis (TSX:FTS) operates a highly regulated utility business, meeting the electric and natural gas needs of over 3.5 million customers. With around 93% of its assets involved in low-risk transmission and distribution business, its financials are less susceptible to market volatility. So, the company generates stable and predictable cash flows, thus allowing it to raise its dividends consistently for 50 years. It currently pays a quarterly dividend of $0.59/share, translating into an annualized payout of $2.36/share and a forward yield of 4.34%.

Meanwhile, Fortis is expanding its low-risk asset base and has planned to make a capital investment of $25 billion from 2024 to 2028. These investments could grow its rate base at an annualized rate of 6.3% to $49.4 billion by 2028. Amid these expansions, the company’s management hopes to raise its dividends by 4-6% annually through 2028. Further, Fortis trades at an attractive NTM (next-12-month) price-to-earnings multiple of 16.8, making it an attractive buy.

Dollarama

Dollarama (TSX:DOL) is another stock that would be an excellent buy in this volatile environment due to its solid underlying business and healthy growth prospects. With its superior direct sourcing model and efficient logistics, the company is offering a wide range of consumer products at attractive prices. So, it has been witnessing healthy same-store sales even during the challenging environment, thus driving its sales. The company has planned to add around 450 stores over the next seven years to increase its store count to 2,000 by fiscal 2031.

Given Dollarama’s capital-efficient business model, quick sales ramp-up, and a low average payback period of less than two years, these expansion plans could boost its top and bottom lines. The company owns a 50.1% stake in Dollarcity, which has a strong presence in Latin America, including Colombia, El Salvador, Guatemala, and Peru. Meanwhile, Dollarcity has planned to expand its store count from 532 to 850 by fiscal 2029, which could increase its contribution towards Dollarama.

Waste Connections

Waste Connections (TSX:WCN) collects, transfers, and disposes of non-hazardous waste in the United States and Canada. The company is expanding its footprint through organic growth and strategic acquisitions, driving its financials and stock prices. It has returned over 545% over the last 10 years at an annualized rate of 20.5%.

Meanwhile, Waste Connections is continuing its acquisitions and has considered this year to be one of the busiest years ever. As of April 24, its acquisitions in 2024 would contribute US$375 million to its annual revenue. Further, the company is building several resource recovery and renewable natural gas facilities and hopes to put at least three of them into operation this year. Meanwhile, the company projects these expansions to deliver incremental adjusted earnings before interest, tax, depreciation, and amortization of $200 million by 2026.

Notably, Waste Connections has rewarded its shareholders by raising dividends at an annualized rate of 14% since 2010. Considering all these factors, I believe Waste Connections would be an ideal buy right now.

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 Rajiv Nanjapla has no position in any of the stocks mentioned. The Motley Fool recommends Fortis. The Motley Fool has a disclosure policy.

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