Got $100? 2 Top Canadian Stocks to Buy and Hold

Don’t let a lack of funds keep you from making more! Instead, start saving slowly and turn that into killer cash.

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published September 20, 2024 8:45 pm EDT

Even saving just $100 a month can create long-term wealth when invested. With an average return of 7% annually, that modest investment could grow to over $120,000 in 30 years! The key to wealth building is consistency and letting your investments compound over time. Even small amounts add up when invested wisely. And with the right Canadian stocks, investors can turn it into a boatload in savings.

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Get started

To get started, Canadians can begin by setting aside small amounts by cutting out unnecessary costs, like that daily coffee or extra streaming subscription. Using the snowball method, you can start with smaller investments and gradually increase them as you free up more cash. Automating these savings is another smart way to ensure you stick to your plan, allowing your money to grow effortlessly over time.

From there, start out with something easy like an exchange-traded fund (ETF). Canadians looking for a safe and steady investment can consider iShares Canadian Financial Monthly Income ETF Common Class (TSX: FIE) on the TSX as a great choice. With a current yield of 6.32% at writing and strong year-to-date returns of 17.65%, FIE offers a blend of income and growth potential. This ETF is an affordable option for investors. The Canadian stock has remained stable, trading in a range of $5.93 to $7.67 over the past year, and its low price-to-earnings (P/E) ratio of 9.17 makes it attractively valued.

FIE’s diversified portfolio, with over $1 billion in net assets, offers exposure to high-quality financial and utility companies. Its beta of 1.16 suggests moderate risk, but the consistent yield and NAV (net asset value) stability show that FIE provides both growth and safety. For Canadians seeking a reliable investment vehicle that delivers consistent returns, FIE is a strong option for building wealth over time.

Growth and income

As you save, consider a Canadian stock with growth and income. Northland Power (TSX: NPI) is another excellent investment choice on the TSX, particularly for those looking for a strong income stream. NPI offers a forward dividend yield of 5.43% at writing, providing investors with a consistent payout. Despite its price decline over the past year, NPI has demonstrated solid earnings momentum, with quarterly revenue growth of 12.20%. Its focus on renewable energy projects positions it well for long-term growth in a sector that is only becoming more important.

With a beta of 0.45, NPI is less volatile than the broader market, providing stability during market swings. While its trailing P/E ratio of 84.08 suggests that the Canadian stock may be overvalued based on past earnings, its forward P/E of 16.29 shows that future growth is expected to be strong. As one analyst noted, “NPI’s renewable energy assets make it a great long-term play in the shift toward clean energy, while still providing reliable dividends.”

Bottom line

In a nutshell, even small monthly savings can turn into significant wealth when invested wisely. Whether you’re starting with $100 or more, options like FIE and NPI on the TSX offer both growth and income potential. With solid yields and exposure to sectors like financials and renewable energy, these investments provide long-term stability. Consistency, cutting costs, and choosing reliable investments are key to building wealth, making these funds ideal for Canadian investors looking to grow their portfolios over time.