The Best TSX Stocks for Canadians to Buy With $1,000 Right Now

With interest rates quickly declining, these three TSX dividend stocks are the perfect alternative to maturing GIC investments.

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With the TSX Index up 17% in 2024, it has been an incredible year for Canadian stocks. Interest rates are dropping, and it is having an inverse effect on the stock market.

Buy these TSX stocks when your GICs mature

Ultra-safe investments like guaranteed investment certificates (GICs) lose their attraction as rates go down. Once their term expires, GICs need to be replaced with other income alternatives because the interest rates are no longer attractive.

Stocks happen to be that alternative. The combination of dividend passive income and capital gains is an appealing option when GIC rates are below 4%, as they now are.

Do you have $1,000 you are looking to deploy for a mix of income and growth? Check out these three stocks to buy as alternatives to GICs or fixed income assets.

A top TSX dividend growth stock

Canadian Natural Resources (TSX:CNQ) is about as good as it gets when it comes to TSX stocks with growing dividend income. Canadian Natural has increased its dividend per share for 25 consecutive years. That alone is a great feat. The fact that it grew its dividend by a 21% compounded annual growth rate (CAGR) is incredible.

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

This TSX stock operates in the cyclical and volatile energy industry. However, it has built out energy assets that have a low cost to operate and decades of oil and gas reserves. This affords it ample flexibility through the commodity cycle.

The energy major just announced a significant acquisition that will grow its production capacity by about 9%. The acquisition builds on regions where Canadian Natural already has substantial operations, so it should be quickly accretive for shareholders.

This TSX stock yields 4.4% right now. For a stock with a foreseeable stream of income for a decade or more, Canadian Natural looks like a solid buy today.

A safe and sound REIT for value and income

First Capital Real Estate Investment Trust (TSX:FCR.UN) is a stock to buy for a great combination of income, value, and growth. It operates a portfolio of prime, urban-focused retail properties across Canada. Its properties are grocery-anchored and have a compliment of tenants that provide essential services.

Created with Highcharts 11.4.3First Capital Real Estate Investment Trust PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

First Capital has been in a turnaround for a couple years. It has sold off non-core assets to improve its balance sheet. Likewise, it has focused on unlocking value in its large bank of land and development assets.

The REIT trades at a significant discount to its private market value, so management has been working to unlock that spread. First Capital has a resilient and stable business with underlying value. It also pays a nice 4.8% distribution yield for those looking for income.

An undervalued TSX REIT

Dream Industrial REIT (TSX:DIR.UN) is another TSX real estate stock for value and income. Dream has 71.9 million square feet of multi-tenant industrial assets across Canada and Europe.

Dream’s largely urban portfolio has supported strong rental rate growth. Across its portfolio, its properties have an average of 30% upside potential in their rental rates on turnover or renewal. This provides substantial organic growth potential.

The REIT also has considerable value-add and development opportunities with its current portfolio. These opportunities are not valued into the stock price today. With interest rates down, acquisition growth could be on the table as well.

For a 5.2% distribution yield and a best-in-class portfolio of assets, Dream is an attractive buy today.

Should you invest $1,000 in Canadian Natural Resources right now?

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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 Robin Brown has no position in any of the stocks mentioned. The Motley Fool recommends Canadian Natural Resources, Dream Industrial Real Estate Investment Trust, and First Capital Real Estate Investment Trust. The Motley Fool has a disclosure policy.

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