5 Stocks You Can Confidently Invest $500 in Right Now

These five Canadian stocks have resilient business model and potential to outperform the broader markets by a wide margin.

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Historically, long-term equity investments have outperformed other financial instruments, making stocks a crucial component of an investment portfolio. Diversifying holdings across various companies can facilitate wealth accumulation, safeguard against inflation, and generate steady passive income. However, stock market investments are inherently risky. Therefore, investors should focus on fundamentally strong companies to generate above-average returns.

So, if you plan to invest $500, let’s look at five Canadian stocks you can confidently buy right now.

Stock #1

Canadian National Railway (TSX:CNR) is an all-weather blue-chip stock to buy and hold confidently. This leading Canadian transportation company operates an extensive rail network and plays a critical role in Canada’s supply chain infrastructure. This makes it a backbone of Canada’s economy, providing essential services that keep it resilient during market ups and downs.

Created with Highcharts 11.4.3Canadian National Railway PriceZoom1M3M6MYTD1Y5Y10YALL8 Apr 20204 Apr 2025Zoom ▾Jul '20Jan '21Jul '21Jan '22Jul '22Jan '23Jul '23Jan '24Jul '24Jan '25202120212022202220232023202420242025202575100125150175200www.fool.ca

Beyond its stability, Canadian National Railway has consistently delivered strong returns. The company has a long history of generating steady capital gains. Moreover, it has rewarded its shareholders by growing its dividend by a compound annual growth rate (CAGR) of 15% since 1996.

The company’s resilient business model, expansion of its rail network, and solid balance sheet position it well to navigate market volatility easily. Moreover, it is poised to deliver decent capital gains and higher dividend payments.

Stock #2

Hydro One (TSX:H) could be a solid option to consider due to its solid earnings base and relatively resilient business model. This utility company provides electricity transmission and distribution services and remains immune to the risks associated with power generation and fluctuations in commodity prices.

Created with Highcharts 11.4.3Hydro One PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Hydro One generates low-risk earnings. Moreover, 99% of Hydro One’s revenue comes from regulated assets. This enables it to generate more predictable earnings and offer reliable dividend payouts. The company expects to grow its rate base at a CAGR of 6% through 2027. This will help the company to increase its earnings by 5-7% per year and raise its annual dividend by about 6%.

Stock #3

Investors can confidently invest in Dollarama (TSX:DOL) stock for its durable earnings, solid growth, and dividend distributions. The Canadian retailer offers products at low and fixed prices. Thanks to its value offerings, the company witnesses steady growth, which supports its share price and dividends in all market conditions.

Created with Highcharts 11.4.3Dollarama PriceZoom1M3M6MYTD1Y5Y10YALL8 Apr 20204 Apr 2025Zoom ▾Jul '20Jan '21Jul '21Jan '22Jul '22Jan '23Jul '23Jan '24Jul '24Jan '252021202120222022202320232024202420252025255075100125150175www.fool.ca

This discount retailer is poised to deliver above-average returns in the upcoming years. Its defensive business model, strategic pricing, expansion of store base, and focus on driving productivity will cushion its earnings and payouts. This stability will drive its share price higher.

Stock #4

Shares of Canadian utility giant Fortis (TSX:FTS) are a no-brainer for stability and solid dividend income. The company’s regulated business generates predictable and growing revenue in all market conditions, supporting its earnings and higher dividend payouts. Fortis has raised its dividend for 50 years and plans to increase it further by 4-6% annually through 2028.

Created with Highcharts 11.4.3Fortis PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

The company’s defensive business model and growing rate base will enhance its earnings potential and support its share price and dividend distributions. The company’s rate base is projected to grow at a CAGR of 6.3% through 2028. Further, its incremental energy infrastructure investments in clean energy augur well for future growth.

Stock #5

Canadian Natural Resources (TSX:CNQ) stock is worth considering due to the company’s ability to generate solid capital gains and higher dividend distributions. Its stock has grown at a CAGR of about 29% in the last five years. Moreover, Canadian Natural Resources enhanced its shareholders’ value by increasing its dividend at a CAGR of 21% in the last 24 years.

Created with Highcharts 11.4.3Canadian Natural Resources PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

The energy giant’s high-value reserves, long-life assets, and growing production will likely drive its earnings and cash flows in the upcoming years. Further, its solid balance sheet and low maintenance capital requirements bode well for growth.

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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 Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool recommends Canadian National Railway, Canadian Natural Resources, and Fortis. The Motley Fool has a disclosure policy.

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