We’re now into the final month of what has been a crazy, volatile 2024. This has seasoned and new investors alike wondering about Canadian stock picks for 2025.
Here’s a look at some of the options to consider buying now and into 2025.
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Start with a great stock for 2025
Most investors are aware of BCE (TSX: BCE) as one of the largest of Canada’s big telecoms. BCE operates a nationwide network of subscription-based services, which includes wireline, wireless, internet and TV segments.
Those segments, which also boast some defensive appeal, provide a recurring revenue stream that helps BCE to pay out a very generous quarterly dividend with a yield of 10.5%.
Why is BCE one of the Canadian stock picks for 2025? The telecom has come under increasing pressure in the past few years, particularly as rising interest rates have made borrowing more expensive. Rising costs have also pushed BCE to limit capital investments and turn to cost-cutting.
Those cost-cutting efforts include staffing reductions, selling off parts of its media arm, and even its interest in MLSE. In the most recent quarter, the company posted a net loss of $1.2 billion. This led the company to announce it was halting dividend increases. Ouch.
So then, why is BCE one of the Canadian stock picks for 2025? The stock is trading down significantly, despite its long-term defensive appeal. BCE is also expanding into the U.S. market through its Ziply acquisition, which should provide long-term growth.
While waiting for that growth to come, investors can enjoy that juicy dividend.
Big Bank, not so big problems?
Canada’s big banks are often regarded as great long-term investment options. And if investors are looking for Canadian stock picks for 2025, the big banks are always near the top of that list. So then, what big bank should investors turn to in 2025?
That would be Canada’s third-largest lender, Bank of Nova Scotia (TSX: BNS). Coincidentally, the bank just announced results for the fourth fiscal, which were below expectations. This led to the stock taking a dip.
As of the time of writing, Scotiabank is trading down nearly 3%, but that doesn’t paint the picture why Scotiabank should be one of the Canadian stock picks for 2025.
Scotiabank is Canada’s most international bank. That includes a presence in developing markets of Latin America as well as a growing presence in the U.S. and Mexico. That presence provides higher growth potential over the saturated and mature domestic market in Canada.
And apart from that stellar growth potential, Scotiabank also pays out a handsome dividend. As of the time of writing, the dividend works out to a tasty 5.3%, making it one of the better-paying among the big banks.
Stability comes standard
It would be hard to compile a list of Canadian stock picks for 2025 (or any year for that manner) and not mention Fortis (TSX: FTS). For those unfamiliar with the stock, Fortis is one of the largest utility stocks on the market.
Utilities like Fortis are great long-term investment options for any portfolio thanks to their reliable business models. In short, utilities are tasked with providing a utility service, for which they are compensated. That compensation is set out in long-term regulated contracts that can span decades.
This means that utilities generate a recurring revenue stream that leaves room for both investing in growth as well as paying out a juicy dividend. As of the time of writing, Fortis’ dividend works out to a respectable 3.9% yield.
Adding to that appeal is Fortis’ status as a Dividend King. This means Fortis has provided investors with annual bumps to that dividend going back at least 50 consecutive years. This easily makes Fortis one of the Canadian stock picks for 2025 and beyond
Final thoughts on the Canadian stock picks for 2025
No stock is without some risk, including the trio of options mentioned above. Fortunately, all three of the stocks above provide some defensive appeal and juicy yields.
In my opinion, one or all of the above should be a core holding in any well-diversified portfolio.
