Investors don’t require a large sum of money to start building a strong long-term investment portfolio. In fact, it is possible to start with as little as $50 and still invest in high-quality Canadian stocks with strong potential for growth over time. By focusing on fundamentally sound companies and consistently investing even modest sums, investors can steadily build a diversified portfolio and achieve significant returns.
Against this backdrop, here are three no-brainer TSX stocks trading under $50 that could help you grow your wealth over time.
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Hydro One stock
Hydro One (TSX: H) offers stability, income, and growth, making it a no-brainer stock under $50. As a large-scale regulated electric utility, the company operates in a sector that is relatively insulated from economic fluctuations, making it a dependable choice for investors across varying market conditions. Hydro One’s core business focuses on electric power transmission and local distribution without involvement in power generation or significant exposure to commodity price volatility. This operational model enhances the stability of its revenue and earnings.
The company’s regulated asset base and predictable cash flows support its dividend payments and share price. Since 2016, Hydro One has consistently increased its dividend. Additionally, its stock has delivered impressive capital gains, appreciating over 121% in the past five years, reflecting a compound annual growth rate (CAGR) of about 17%.
Hydro One’s solid financial position will enable it to capitalize on growth opportunities. Its expanding rate base and strong cash flows are expected to support the modernization of aging infrastructure, driving future earnings and dividend increases. The company projects its rate base to grow at a CAGR of 6% through 2027. At the same time, its dividend will sport a similar growth rate.
In summary, Hydro One’s low-risk earnings, ongoing rate base expansion, and commitment to enhancing shareholder value are likely to act as catalysts and support share price appreciation.
Aritzia stock
Aritzia (TSX: ATZ) is a multi-channel clothes retailer that is growing fast and well-positioned to deliver outsized returns in the long term. The company’s top line has grown at a CAGR of 19% since fiscal 2016, and its bottom line grew at a CAGR of 13% during the same time. Thanks to its solid financials and growing geographic presence, Aritzia stock has grown at an above-average rate of nearly 19% per year, delivering capital gains of about 136%.
Looking ahead, the upward trend in Aritzia stock will likely continue, driven by new boutique openings. The retailer’s increased pace of boutique openings is expected to fuel retail sales growth and drive incremental e-commerce sales as it expands into new markets. Moreover, introducing new styles, expanding omnichannel offerings, and cost savings will drive its revenue and earnings and, in turn, its share price.
Aritzia’s top line is forecasted to grow at a mid-teens rate in the medium term, driven by geographical expansion. Meanwhile, the momentum in its e-commerce business, increasing brand visibility, and smart spending initiatives will accelerate its earnings growth rate.
WELL Health stock
WELL Health (TSX: WELL) is a no-brainer stock to buy under $50. The omnichannel healthcare company is experiencing rapid growth, fueled by a rise in patient visits and the benefits of its acquisitions.
In the third quarter (Q3) of 2024, WELL Health delivered one of the strongest performances in its history, achieving record levels in revenue, free cash flow, patient visits, and organic growth. Notably, the company surpassed the $1 billion mark in annualized revenue run rate, accomplishing this milestone one quarter ahead of schedule.
WELL Health’s impressive results were primarily driven by the Canadian Patient Services segment, which reported robust revenue growth of 35% year-over-year. Additionally, WELL Health’s acquisition pipeline is the most robust it has ever been, with 17 signed Letters of Intent (LOIs) and definitive agreements pending closure.
With solid momentum in its core operations, the launch of new products, and the growing strength of its U.S.-based virtual care platforms, WELL Health is well-positioned for continued growth. The company’s emphasis on enhancing cash flow and reducing debt augurs well for future growth.
