Beginning Investors: 3 TSX Stocks I’d Buy With $500 Right Now

Here’s why these three TSX stocks are a must-buy for new investors with a long-term horizon.

| 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

For new investors, there’s a game-changing way to invest with minimal cost – $0 trading fees on platforms like Wealthsimple. By avoiding hefty fees, you can boost your investment returns. Here are three TSX stocks I’d snap up in a heartbeat today.

Why TD Bank stock is a must-buy right now

If I didn’t already own a sizeable stake in Toronto-Dominion Bank (TSX:TD), I’d jump at the chance to invest $500 today. TD Bank has a strong footprint in Canada and the United States. Its impressive track record speaks volumes: since 2010, it’s delivered a compound annual growth rate (CAGR) of nearly 11% in revenue per share, translating to over 6% annual earnings-per-share (EPS) growth and a 9% boost yearly in dividends.

The blue chip stock has essentially traded sideways since mid-2022, creating a prime buying opportunity for the long haul. Trading at $80.16 per share with a price-to-earnings ratio of about 10, TD stock is priced 14% below its historical norm. Coupled with a solid dividend yield of nearly 5.1%, it’s an attractive choice for stable returns.

Why CN Rail stock should be your next $500 investment

Canadian National Railway (TSX:CNR) is a standout choice for your next $500 investment. Despite the economic ups and downs, CN Rail has consistently excelled. As a top North American operator with a vast and efficient rail network, CN has achieved an impressive CAGR of 8.5% in revenue per share from 2010 to 2023. This has led to EPS growth of 10.8% and dividend growth of 14.6% annually in the period.

Currently, CN Rail stock is down more than 10% from its 52-week high. At $159.77 per share and trading at about 21 times adjusted earnings, it offers a 2.1% yield and a reasonable valuation with solid growth potential.

Brookfield Infrastructure: A top utility stock for wealth creation

Brookfield Infrastructure Partners L.P. (TSX:BIP.UN) is a buy-hold-and-buy-more stock. With a diversified portfolio of essential infrastructure assets across utilities, transport, midstream, and data, it is well-positioned to benefit from long-term, mega-growth trends.

Over the last decade, a $10,000 investment in BIP.UN would have transformed to approximately $38,600, beating both the utility sector and the Canadian stock market, as shown in the graph below.

BIP.UN Total Return Level Chart

BIP.UN, XUT, and XIU Total Return Level data by YCharts

Imagine making even more money, in the long run, if you bought more shares on meaningful market corrections.

The top Canadian utility stock is set up for continuous success, driven by strategic capital allocation, operational expertise, and ownership of cash-cow assets. Its growing cash distributions are a key component of investor returns.

For your reference, its 10-year cash distribution growth rate is 8.3% per year. Today, BIP.UN starts you off with a yield of 5.2%. And going forward, it aims to raise its cash distribution by 5-9% per year.

The Foolish investor takeaway

These three Canadian stocks have strong fundamentals and trade at good valuations. With their proven track records, growing dividends, and promising growth, they represent ideal opportunities for beginning investors to build their portfolios today.

Should you invest $1,000 in Brookfield Infrastructure Partners right now?

Before you buy stock in Brookfield Infrastructure Partners, 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 Brookfield Infrastructure Partners 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 Kay Ng has positions in Brookfield Infrastructure Partners, Canadian National Railway, and Toronto-Dominion Bank. The Motley Fool recommends Brookfield Infrastructure Partners and Canadian National Railway. 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 Stocks for Beginners

protect, safe, trust
Dividend Stocks

Where I’d Allocate $20,000 in 2 Safer High-Yield Dividend Stocks for Retirement Needs

Here are two safer, high-yield dividend stocks I'm looking at for my retirement needs.

Read more »

Senior uses a laptop computer
Energy Stocks

Here’s How Investors Can Turn $15,000 in a TFSA Into $235,000

Energy stocks aren't created equal, and this one might be one of the best of the batch.

Read more »

A red umbrella stands higher than a crowd of black umbrellas.
Dividend Stocks

3 Reasons I’m Considering Enbridge Stock for a $5,000 Investment This April

I'm considering Enbridge stock to provide some defensive appeal and a juicy dividend to my long-term portfolio.

Read more »

monthly desk calendar
Dividend Stocks

A 9.2% Dividend Stock Paying Cash Every Single Month

With one of the highest dividends out there, this dividend stock deserves attention in your portfolio.

Read more »

Map of Canada showing connectivity
Tech Stocks

1 Magnificent Canadian Stock Down 16% to Buy and Hold Forever

This Canadian stock might be one of the best opportunities out there right now while shares are down.

Read more »

Woman in private jet airplane
Stocks for Beginners

2 Canadian Value Stocks I’d Add to My Portfolio While They’re Still Cheap

Canadian stocks nose-dived and recovered in a matter of a week. Despite the recovery, the sentiment is bearish, making way…

Read more »

Happy shoppers look at a cellphone.
Stocks for Beginners

Top Canadian Stocks to Buy Immediately With $1,000

Want some oversold, Canadian stocks with a bright future? Then check out these!

Read more »

Person slides down a stair handrail
Dividend Stocks

Should You Buy Cargojet Stock at $70?

Cargojet stock might be down, but don't let that scare you off. It's still a long-term opportunity.

Read more »