It has already been a pretty good year for Canadian stocks. The S&P/TSX Composite Index is up 4% in the past month and 8.7% year to date. Fortunately, there are still plenty of opportunities in the market.
When you pick individual stocks, you can always find buying opportunities. That is especially true if you have a long-term investment horizon. Time in the market affords you the flexibility to sometimes get timing or even valuation a little bit off. Great quality businesses always seem to bounce back quickly.
Many successful investors invest whenever they have spare cash. Over time, this strategy fast-tracks the compounding potential of owning stocks. If you have $500 and are looking for some diverse high-quality stocks to add right now, here are three stocks to look at adding today.
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A solid stock for dividends
Canadian Natural Resources (TSX:CNQ) stock is down 11% over the past three months. Yet, oil prices have only pulled back 5%. This suggests there is a disconnect in the stock valuation. CNQ is yielding 4.3% today.
CNQ operates in a cyclical industry. However, it has built out a resilient energy production machine. The company is extremely efficient so it can generate significant amounts of cash, even if energy prices decline.
It also has decades of energy reserves. This gives it a foreseeable future of returns. Now that it has hit its long-term debt target, it is delivering all its excess cash to shareholders.
That means it has plenty of options to reward shareholders (share buybacks, base dividend growth, or special dividends). This isn’t the cheapest energy stock, but its dividend is safe and growing. CNQ is of the best-quality dividend-growth stocks in Canada so why not buy it on a pullback?
A small cap with a big future
With a market cap of $2.1 billion, Trisura Group (TSX:TSU) is one of the smallest insurance stocks in Canada and North America.
It is also one of the best-performing insurance stocks. Its stock is up 500% over the past five years. Returns have stalled over the past two years, but it might be set for another run.
Trisura provides specialized lines of insurance. Smart underwriting and expertise in its core competencies have enabled it to earn very strong returns on equity. It is expanding into the U.S. and that could provide substantiative earnings growth in the future.
It also helps that Trisura trades at a large discount to other specialized insurance peers. It could enjoy a nice catch-up trade if it can continue to execute.
A large-cap stock with a 100-year history
Another great stock to buy with $500 is Canadian National Railway (TSX:CNR). This company has been around for just over 100 years. Its rail network has stood the test of time and it will likely continue to do so in the future.
Its stock is down around 7% in the past three months. CNR has been facing some headwinds from a tough freight environment, a looming strike, and some challenging natural disruptions. These are likely to impact 2024 results, but they don’t change the long-term thesis for CNR’s stock.
CNR has a sector-leading balance sheet, an excellent network, and smart management team. It also has multiple decades of strong dividend growth. If you can look past some near-term weakness, this could be a great time to add this stock.
