If you’re new to investing, consider choosing stocks with solid fundamentals. Look for companies with strong business models that consistently deliver profitable growth, offer regular dividends, and have promising growth potential. The good news is that you don’t need a large sum of money to get started. Even investing a small amount—like $50—can help you begin building a portfolio of high-quality, reliable stocks.
Against this backdrop, let’s explore three Canadian stocks trading under $50 with solid growth potential and commitment to enhancing shareholders’ value.
Canadian Natural Resources
New investors could consider adding Canadian Natural Resources (TSX: CNQ) stock. This oil and gas producer is known for consistently delivering solid financials, making it a reliable choice for investors to generate steady dividend income and capital gains.
Shares of this energy giant have appreciated over 282% in the last five years, outpacing the broader equity markets by a wide margin. Besides capital gains, Canadian Natural Resources enhanced its shareholders’ value by consistently increasing its dividends for 24 years. Moreover, Canadian Natural Resouces’s dividend grew at a compound annual growth rate (CAGR) of an impressive 21%.
Canadian Natural Resources is well-positioned for continued growth. The company’s long-life asset base, high-value reserves, and low-maintenance capital will likely support its earnings and cash flows. In addition, the company’s disciplined capital-allocation strategy and strong balance sheet will further support its growth initiatives, drive future dividend payments, and boost its share price.
In summary, Canadian Natural Resources’s solid financials, growth potential, and commitment to enhancing shareholder returns make it a solid investment option, especially for those just starting their investment journey.
Hydro One
Hydro One (TSX: H) could be another solid bet for new investors. This company, engaged in electricity transmission and distribution, is well-known for generating attractive capital gains while paying consistent dividends.
The utility company focuses on electric power transmission and local distribution without involvement in power generation or exposure to fluctuating commodity prices. This enables Hydro One to generate low-risk earnings and stable cash flows. Further, it earns 99% of its income from regulated assets, implying its steady earnings growth and resilient payouts.
Hydro One maintains a solid financial position, enabling it to fund growth initiatives without needing additional external equity.
Hydro One expects its rate base to grow at a CAGR of 6% through 2027. This growth will support earnings expansion of 5-7% per year, along with a projected annual dividend increase of 6% during the same period.
With its low-risk business model, predictable cash flows, steady growth, and ability to deliver both dividends and capital gains, Hydro One is an excellent stock for new investors seeking a reliable and long-term opportunity.
Brookfield Renewable Partners
Brookfield Renewable Partners (TSX: BEP.UN) is a solid long-term stock that offers new investors exposure to the promising renewable energy sector. As a pure-play clean energy company, Brookfield is poised to benefit from the global shift toward sustainable energy sources.
Brookfield’s highly diversified portfolio of renewable assets and growing power generation capabilities position it well to capitalize on green energy demand. Further, most of Brookfield’s power output is secured under long-term contracts, providing stable and predictable revenue. Notably, most of its contracts are indexed to inflation, meaning the company enjoys steady organic growth as prices rise.
Brookfield has consistently grown its funds from operations (FFO) at a double-digit pace, supporting higher dividend payments. The company will continue returning cash to its investors, and with FFO growing, Brookfield could raise dividends further. Notably, Brookfield projects annual dividend growth of 5-9% in the coming years. Moreover, it offers a high yield of over 5.9%.
In summary, Brookfield Renewable Partners has solid growth potential and offers a growing dividend income.
