3 Top Stocks for the Second Half of 2024

With interest rates declining in Canada and an uncertain economic environment persisting, here are three of the top stocks to buy in 2024.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

With the second half of the year now well underway, there is plenty of anticipation for what’s to come, especially with interest rates now on the decline in Canada and soon to be reduced south of the border. Higher interest rates have weighed on stocks across various sectors in recent years, meaning a lowering of rates is creating a major opportunity for top Canadian stocks to see a significant rally to finish 2024.

However, the reason interest rates are now declining is that both the economy and inflation have been cooling off. So, while lower interest rates will be positive for many businesses, the cooling economic environment is another risk that investors need to be aware of.

That’s why some of the top stocks to buy for the second half of 2024 are safe and reliable businesses that can not only benefit from lower interest rates but can also weather the storm of a worsening economy, especially if we don’t get the soft landing that policymakers are hoping for.

So, if you’ve got cash on the sidelines that you’re looking to put to work today, here are three top Canadian stocks to buy today.

A top utility stock to buy for the second half of 2024

If you’re looking to add stocks to your portfolio that can benefit from lower interest rates yet remain stable should the economy continue to worsen, a high-quality utility like Fortis (TSX:FTS) is one of the best to buy now.

Created with Highcharts 11.4.3Fortis PriceZoom1M3M6MYTD1Y5Y10YALL7 Apr 20204 Apr 2025Zoom ▾Jul '20Jan '21Jul '21Jan '22Jul '22Jan '23Jul '23Jan '24Jul '24Jan '25202120212022202220232023202420242025202540506070www.fool.ca

As a top dividend stock and a company that uses plenty of debt to leverage its operations, Fortis can benefit significantly as interest rates decline.

First off, as yields fall Fortis’ stock should see a bit of a rally, as its dividend yield will also begin to fall as a result, sending its share price higher. Furthermore, lower interest rates means it will cost less to service its debt in the coming years, which would boost its profitability.

Plus, as a utility stock, Fortis is one of the safest and most recession-resistant businesses that hardly ever sees an impact on operations during economic slowdowns due to the essential services it provides.

Therefore, while Fortis still trades off its all-time high and offers a dividend yield of 4%, it’s certainly one of the top stocks to buy now for the second half of 2024 and beyond.

Two top infrastructure stocks

In addition to Fortis, both Brookfield Infrastructure Partners (TSX:BIP.UN) and Enbridge (TSX:ENB) are two more top stocks to consider buying now for many of the same reasons as Fortis.

Both Brookfield and Enbridge provide essential services and have highly diversified operations, which mitigates risk and makes them ideal stocks to hold through an economic slowdown.

Brookfield’s global portfolio of assets, such as telecom towers, ports, railroads utilities and more, ensures a steady flow of cash flow each quarter. Meanwhile, Enbridge’s operations are essential for the North American economy.

In addition, each of these stocks also uses billions of dollars of debt to help leverage their operations, and both of these stocks also pay significant dividends. So as interest rates decline, both Enbridge and Brookfield could start to see a sustained rally.

For example, from 2021 to 2023, Enbridge’s interest expense jumped from just shy of $2.7 billion to more than $3.8 billion. Similarly, Brookfield’s interest expense jumped from just shy of $1.5 billion in 2021 to more than $2.5 billion in 2023, an increase of more than 70% in just two years.

Therefore, as rates decline and these companies’ interest expenses decline, their profitability should see a meaningful improvement.

Furthermore, as rates decline, sending yields lower, both stocks could see a significant uptick in their share prices in the months ahead.

So, while you can buy Enbridge while it’s still relatively cheap and offers a yield of more than 6.8%, and while Brookfield Infrastructure offers a yield of more than 5.4%, these two dividend growth stocks are some of the top investments, not just to consider now for the second half of 2024, but also to hold for years to come.

Should you invest $1,000 in Canadian Natural Resources right now?

Before you buy stock in Canadian Natural Resources, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Canadian Natural Resources wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $20,697.16!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 29 percentage points since 2013*.

See the Top Stocks * Returns as of 3/20/25

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 Daniel Da Costa has positions in Brookfield Infrastructure Partners and Enbridge. The Motley Fool recommends Brookfield Infrastructure Partners, Enbridge, and Fortis. The Motley Fool has a disclosure policy.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Dividend Stocks

A train passes Morant's curve in Banff National Park in the Canadian Rockies.
Dividend Stocks

1 Practically Perfect Canadian Stock Down 24% to Buy Now and Hold for Life!

CNR stock is a top Canadian stock for investors, especially with shares down on the TSX today.

Read more »

Canada national flag waving in wind on clear day
Dividend Stocks

The Best Canadian Stocks to Buy Right Away With $30,000

If you have $30,000 you're willing to invest, these are some of the first Canadian stocks to consider on your…

Read more »

rail train
Dividend Stocks

What to Know About Canadian Pacific Railway Stock for 2025

CP stock has now gone through a major merger, so what do investors have to look forward to?

Read more »

ways to boost income
Dividend Stocks

Top Canadian Value Stocks I’d Buy for Dividend Growth and Appreciation

If you are looking for income and capital appreciation, here are three Canadian value stocks for a great total return…

Read more »

coins jump into piggy bank
Dividend Stocks

The Smartest Canadian Stock to Buy With $2,000 Right Now

The company’s powerful combination of growth, income, and value, positions it well to deliver solid returns, making it a smart…

Read more »

Transparent umbrella under heavy rain against water drops splash background. Rainy weather concept.
Dividend Stocks

This 10.6 Percent Dividend Stock Pays Cash Every Single Month

Are you looking to invest for a rainy day? This 10.6% dividend stock pays cash every month, irrespective of the…

Read more »

A worker gives a business presentation.
Dividend Stocks

Market Dip: Opportunity or Risk This April?

This market dip might have investors worried, but should they be excited instead?

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

Why I’d Add This Top TSX Dividend Stock to My TFSA During the Current Dip

The market is full of volatility right now. Fortunately, this top TSX dividend trades at a discount and pays a…

Read more »