The Best Canadian Stocks to Buy With $5,000 Right Now

These top stocks have tremendous growth potential and are trading off their highs, making them some of the best Canadian stocks to buy now.

Daniel Da Costa

Author Bio Daniel joined The Motley Fool Canada in 2019 and brings experience in banking, investing, and financial analysis. Growing up as the son of a proprietary stock trader and educator, he developed an early interest in financial markets and a passion for helping Canadians improve their financial well-being. His work spans investment research, economic analysis, and econometric modelling, with a focus on understanding the broader forces that influence businesses, markets, and the economy. As an investor, Daniel looks for high-quality businesses with long-term growth potential, reliable income, and attractive valuations. Outside of finance, Daniel enjoys spending time with his family, playing hockey, running, and sailing. Areas of Expertise Investment research, economic analysis, econometric modelling, banking, financial analysis, business fundamentals, long-term investing, dividend investing, and company valuation. Favorite Investment Quote "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price." — Warren Buffett

Published October 8, 2024 9:45 pm EDT

As we head into the final few months of the year, a tonne of opportunities are materializing among some of the best Canadian stocks that you can buy.

As inflation consistently cools off and interest rates continue to decline both in Canada and the United States, there is strong potential for markets to see a significant rally.

Lower interest rates not only improve sentiment among investors and cause stock prices to rise, especially dividend stocks, but they also reduce the cost of debt for companies, making it easier to turn a profit in this environment.

Therefore, as interest rates continue to decline over the next few months, many of the best Canadian stocks have significant potential to rally, making them companies you’ll want to buy today.

The key is to ensure you’re buying the highest-quality companies on the market and, if possible, you are buying these stocks as cheaply as you can.

So, with that in mind, if you’re looking for some of the best Canadian stocks to buy with $5,000 right now, here are two of the top picks to consider today.

One of the best Canadian retail stocks to buy now

Over the past year, one of the best Canadian stocks on the TSX that has struggled significantly has been Canadian Tire (TSX: CTC.A). With the market now improving, though, and with Canadian Tire stock already beginning to recover, there’s no question it’s one of the best Canadian stocks to buy now.

For years, Canadian Tire has been one of the best retail stocks in the country. It has a massive footprint, one of the best-known brands in Canada and a significant loyalty program, which not only helps to drive sales but also provides valuable data analytics about its customers. Over the past year, though, Canadian Tire was impacted quite significantly.

First off, it experienced some seasonal impacts on its business, which isn’t uncommon for Canadian Tire from time to time. However, when you combine the minor seasonal impacts on Canadian Tire’s sales with slower consumption as a result of higher interest rates and inflation, the effects can become significant.

So as Canadian Tire’s business now recovers and its stock price follows suit, there’s no question it’s a top pick for Canadian investors in this market environment.

Currently, analysts expect Canadian Tire to generate $12.16 in normalized earnings per share (EPS) this year, up more than 17% from last year. In addition, the Canadian retailer is expected to increase its normalized EPS by another 11.6% next year to $13.58.

Therefore, while Canadian Tire continues to trade undervalued and offers an impressive yield of roughly 4.4%, it’s easily one of the best Canadian stocks to buy right now.

An impressive long-term growth stock

In addition to Canadian Tire stock, another of the best Canadian stocks to buy right now is Brookfield Renewable Partners (TSX: BEP.UN), the massive green energy company.

There’s no question that renewable energy is the future and the shift to this cleaner energy will be decades long, creating some significant opportunities for investors.

So, with Brookfield offering a massive portfolio of renewable energy operations managed by a professional team and diversified worldwide, it’s undoubtedly one of the best Canadian stocks to buy now.

The stock has a tonne of capital to deploy and grow its operations, an impressive organic growth pipeline and a track record of consistent growth, both in the share price and the distribution it pays to investors.

Plus, in addition to its impressive growth pipeline and demonstrated ability to make value-accretive acquisitions, Brookfield also recently signed a framework agreement to provide Microsoft with 10.5 GW over a five-year time frame as we continue to see rapidly increasing demand from corporate buyers.

So, with all its growth potential and after signing its new agreement with Microsoft, analysts are now predicting that Brookfield will see a 20% increase in revenue and generate an additional 14% in funds from operations this year alone.

Therefore, while you can buy one of the best growth stocks in Canada as it trades off its highs, there’s no question it’s a top pick for Canadian investors today.