Now’s as good a time as any to be investing in the Canadian stock market. The market as a whole is full of momentum right now. The broader Canadian stock market index, the S&P/TSX Composite Index, is up 20% over the past 12 months, not even including dividends.
At some point, we’ll inevitably be hit with a pullback. That being said, there’s no sense in trying to time the market. As long as you’re in it for the long haul, there’s no better day than today to get into the stock market.
With that in mind, I’ve put together a well-diversified list of three top Canadian stocks. Altogether, this reasonably priced basket of stocks can provide an investment portfolio with both market-beating growth potential and plenty of passive income.
If one of your resolutions this year is to invest in the stock market, these are three companies that should be on your radar.
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Constellation Software
At more than $4,000 a share, Constellation Software (TSX: CSU) is not exactly a cheap stock, at least from a price perspective. The valuation of the stock is a completely different story. Nonetheless, investors will need to shell out some serious cash to own shares of this Canadian tech giant.
What’s important to keep in mind, though, is not how many shares of a company you own but rather the money you have invested in the stock.
While Constellation Software may require a steep initial investment, it’s been well worth the price of admission for recent investors. Shares of the tech stock are up 30% over the past year and 250% over the past five years. Those returns have easily outpaced the returns of the broader Canadian stock market.
goeasy
goeasy (TSX: GSY) is another proven growth stock but at a much cheaper price point than Constellation Software. Shares are also trading 20% below all-time highs from 2021.
The consumer-facing financial services provider took a hit as interest rates began spiking. But as the rates have been getting cut as of late, the stock has been reacting positively. The expectation is that as interest rates lower, goeasy will see an increase in demand for its services.
With more rate cuts potentially just around the corner, now could be an incredibly opportunistic time to start a position in goeasy. This is a proven market-beater that likely won’t be trading at a discount for much longer.
Brookfield Renewable Partners
Last on my list is a beaten-down renewable energy stock.
Like many others in the space, Brookfield Renewable Partners (TSX: BEP.UN) has been on the decline since early 2021. Excluding dividends, shares are down close to 50% since the beginning of 2021.
For short-term investors, aside from the passive income, this might not be an enticing pick. But for the long-term, patient investor, there’s a lot of potential value here that should not be ignored.
Brookfield Renewable Partners is a global leader in a sector that’s loaded with long-term growth potential. It might take some time, but it’s hard to believe that at some point, the energy stock won’t return to its market-beating ways.
One silver lining of the recent skid is that there’s been a massive surge in the dividend yield. At today’s stock price, Brookfield Renewable Partners’s dividend is yielding a whopping 6%.
