Investing in equities is an excellent strategy for building wealth over longer periods. However, one must be careful when starting their investment journey and look for companies with resilient business models, consistent earnings growth, and healthy cash flows. Against this backdrop, let’s look at three top Canadian stocks that I believe are ideal for beginners.
Dollarama
Dollarama (TSX:DOL) operates 1,601 stores across Canada, with 85% of Canadian households having at least one store within a 10-kilometre radius. Its superior direct sourcing and efficient logistics have allowed the company to offer various consumer products at attractive prices, thus enjoying healthy same-store sales even during a challenging macro environment. Supported by these solid same-store sales and store network expansion, the company has grown its topline and EBITDA (earnings before interest, tax, depreciation, and amortization) at 11.1% and 16.6% since fiscal 2011, respectively. Its EBITDA margin has also expanded from 16.5% in fiscal 2011 to 32% in fiscal 2025 (first three quarters).
Moreover, Dollarama continues to expand its store network and hopes to raise its store count to 2,200 by the end of fiscal 2034. It is also expanding its digital footprint and optimizing check-out processes to further enhance customer experience and convenience. The company also owns a 60.1% stake in Dollarcity, a Latin American retailer that operates 588 discount stores. Dollarcity has an aggressive expansion plan and expects to increase its store count to 1,050 by the end of fiscal 2031. Further, Dollarama can increase its stake to 70% by exercising its option within the end of fiscal 2027. Considering its solid financial growth and impressive growth prospects, I believe Dollarama would be ideal for beginners.
Waste Connections
Another Canadian stock I believe would be ideal for beginners is Waste Connections (TSX:WCN), which collects, transfers, and disposes of non-hazardous wastes. With its operation primarily in secondary and exclusive markets, it faces lesser competition and enjoys higher margins. Further, the Toronto-based company has been expanding its footprint through organic growth and acquisitions, which have driven its financials and stock price growth. Over the last 10 years, the company has returned over 500% in the previous 10 years at an annualized rate of 19.6%.
Moreover, WCN is constructing 12 renewable natural gas facilities and expects them to become operational next year. These facilities could contribute $200 million towards its adjusted EBITDA. Further, last year was the busiest for the waste management company, with record acquisitions. These acquisitions could also contribute to this year’s financial growth. The company has also adopted technological advancements to improve efficiency and employee safety. Further, its innovative approach to employee engagement has resulted in lower turnovers, thus expanding its operating margins. The company has raised its dividends uninterrupted since 2010 at an annualized rate of 14%.
Enbridge
As my final pick, I have chosen Enbridge (TSX:ENB), an energy giant that has paid dividends for 69 years. Its regulated tolling frameworks, long-term take-or-pay contracts, and PPAs (power-purchase agreements) provide a base for stable recurring revenues, thus allowing it to reward its shareholders with consistent dividends. The Calgary-based energy company has also raised its dividend for the previous 30 years and currently offers a juicy forward dividend yield of 5.94%.
Meanwhile, Enbridge is expanding its assets base with an annual capital investment of $8-$9 billion. The recent acquisition of three natural gas utility assets could further strengthen its cash flows while lowering business risks. Amid these growth prospects, the management expects its EBITDA to grow by 7-9% annually through 2026. Considering all these factors, I believe Enbridge is well-positioned to continue its dividend growth, thus making it an ideal buy for beginners.
