Beginner Investors: 2 Top Canadian Stocks for 2024

When it comes to beginners, the best and brightest move is to look into top ETF payers for your portfolio.

| More on:
Technology

Image source: Getty Images

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 beginner investors in Canada, exchange-traded funds (ETFs) have been a big hit. These offer an easy and affordable way to diversify. In fact, a recent report showed that Canadian ETFs brought in over $55 billion in 2021 alone, a sign of their growing popularity. These funds generally have lower fees and spread your investment across many stocks or bonds, reducing risk. Meanwhile, on average, these ETFs can bring in an average return of 7%. That makes them great for newbies testing the waters! So, let’s get into two of the best for the remainder of 2024.

Created with Highcharts 11.4.3Vanguard Ftse Canada All Cap Index ETF + Hamilton Enhanced Multi-Sector Covered Call ETF PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

VCN

Vanguard FTSE Canada All Cap Index ETF (TSX:VCN) is an excellent choice for long-term passive income, particularly for investors looking to gain broad exposure to the Canadian market. This ETF covers a wide range of companies, from large to small caps, which gives it a well-diversified portfolio. It’s highly affordable, too, with an expense ratio of just 0.05%. Thus making it a low-cost way to track Canada’s overall market performance. Over the past year, VCN has shown impressive momentum, delivering a year-to-date return of 15% as of September 2024. Its yield of 2.77% at writing adds to its attractiveness for those seeking steady income streams​.

VCN’s 52-week range of $38.05 to $48.36 suggests that it has experienced strong growth while maintaining a low price-to-earnings (P/E) ratio of 14.22. This indicates good value for long-term investors. The ETF’s beta of one also shows it moves in line with the broader market, making it a balanced choice for those seeking moderate risk. Given its robust fundamentals and strong historical returns, averaging around 8.85% annually since inception, VCN is perfect for a set-and-forget investment strategy. As Vanguard highlights, “ETFs like VCN provide a low-cost, diversified approach to investing in a variety of sectors,” thus making it a solid pick for those aiming to grow passive income over time.

HDIV

Hamilton Enhanced Multi-Sector Covered Call ETF (TSX:HDIV) is a standout option for long-term passive income, especially for investors seeking high yields. This ETF offers a compelling annual yield of 12.08% at writing, paid out in monthly distributions. Thus making it a solid choice for those prioritizing regular income. HDIV uses a covered call strategy to boost returns, investing in a diversified portfolio across sectors like financials, technology, and energy. The fund’s leverage of 25% helps enhance both growth and yield, which has resulted in a year-to-date return of 15.78% as of writing.

For those focused on steady income streams, HDIV’s monthly payouts have remained consistent at $0.171 CAD per share recently, which is particularly appealing in today’s fluctuating market. The fund also boasts a total return of over 24% in the last year, demonstrating strong performance momentum. As Hamilton ETFs explains, “HDIV has consistently outperformed the S&P/TSX 60, with a higher yield and solid diversification.” This makes HDIV an excellent fit for income-focused investors looking for high monthly dividends and robust performance

Bottom line

Both the VCN and HDIV ETFs offer excellent opportunities for long-term passive income but cater to different investor needs. VCN provides broad exposure to the Canadian market with steady growth, a reasonable 2.77% yield, and a diversified portfolio across sectors, making it ideal for those seeking a balance of growth and income. On the other hand, HDIV is a powerhouse for high monthly payouts, boasting a hefty 12.08% yield and leveraging covered calls to enhance returns. Whether you’re in it for the slow, steady gains or the high-yield monthly income, both ETFs offer compelling reasons to buy and hold​.

Should you invest $1,000 in Enbridge right now?

Before you buy stock in Enbridge, 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 Enbridge 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 Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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

An investor uses a tablet
Stocks for Beginners

The Smartest Canadian Stock to Buy With $250 Right Now

Are you looking for the smartest Canadian stock to buy right now? Consider this gem and avoid market volatility.

Read more »

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 »

Paper Canadian currency of various denominations
Stocks for Beginners

2 Canadian Value Stocks for 2025

There's a fair bit to consider when looking at value stocks, so let's look at two that fit the bill.

Read more »

data analyze research
Stocks for Beginners

Smart Money’s Playbook for the Current Market Dip

This market dip might be worrying investors, so don't worry with these two stocks.

Read more »

Canada day banner background design of flag
Tech Stocks

The Top Canadian Stock to Buy With $5,000 in 2025

There are few Canadian stocks out there that offer the outlook of this tech stock, bound for more growth.

Read more »

Cannabis business and marijuana industry concept as the shadow of a dollar sign on a group of leaves
Stocks for Beginners

Buy the Dip Before It’s Too Late: This Canadian Stock Won’t Stay Cheap Forever

Investors might think that cannabis stocks are out, but this one could be the top Canadian stock to consider.

Read more »