Stocks can generate higher returns than many other types of investments over the long term. The great thing is that you don’t need a large sum of money upfront to invest in high-quality TSX stocks. Even starting with as little as $100 in fundamentally strong stocks regularly can lead to significant returns over time.
With that backdrop, here are two top Canadian stocks investors can buy and hold for just $100. These companies have well-established businesses and solid growth potential, making them top choices for investors looking to grow their money.
Hydro One
Investors could consider Hydro One (TSX: H) as it offers growth, stability, and income. Unlike other utility companies, Hydro One does not generate power and is not exposed to commodity price volatility. This means it is a pure-play electric power transmission and distribution company that produces stable, low-risk earnings and predictable cash flow.
Hydro One has solid financials, which allow the company to fund its growth initiatives without raising capital from other external sources. Owing to its stellar financials and rate-regulated business, this utility company consistently delivers stable cash flows, offers higher dividend payments, and attractive capital gains.
Hydro One has consistently grown its dividend, supported by higher earnings, regulated cash flows, and rate base growth. The company raised its dividend at a compound annual growth rate (CAGR) of about 5% from 2016 to 2022. Moreover, it increased its dividend by 6% in 2023 and plans to grow it at a similar pace through 2027.
Hydro One projects its rate base to grow by 6% annually through 2027. The company’s $11.8 billion capital plan will support this growth. Thanks to this growth, its earnings per share are forecasted to increase by 5-7% annually.
Hydro One stock has appreciated about 32.6% in one year and grown about 124% in five years. Despite the growth, the stock still has room for upside, driven by its low-risk business model and steady earnings. Further, its solid balance sheet, predictable cash flows, cost reduction initiatives, and ability to deliver both dividends and capital gains make it a top Canadian stock to buy and hold for the long term.
Aritzia
Clothing retailer Aritzia (TSX: ATZ) is another top Canadian stock for long-term investors. The company is known for delivering above-average growth, reflected through its double-digit revenue and adjusted net income growth. Further, it has consistently outperformed the TSX.
For instance, the company’s revenue and net income have grown at a CAGR of 19% and 13% in the last five years, which has driven its shares higher. Aritzia stock has increased over 197% in five years, reflecting a CAGR of 24.3%. Meanwhile, the stock gained over 130% in one year, and this trend will likely continue, owing to the continued growth in its top line and focus on margin expansion.
Aritzia sees its net revenue growing by 15-17% annually through fiscal 2027. Aritzia plans to open eight to 10 new boutiques in the U.S. annually through fiscal 2027 and increase its total retail square footage by up to 60%, likely boosting its revenues. Additionally, Aritzia’s focus on growing its omnichannel offerings and increasing brand awareness will further accelerate its revenue growth rate.
Overall, higher sales and operating efficiency will likely bolster its earnings and support its share price.
