If you’re looking to build wealth through stocks, focusing on high-quality options can yield significant capital gains over time. Even starting with as little as $50, you can begin adding fundamentally strong Canadian stocks to your portfolio.
Here’s a list of top Canadian stocks priced under $50, making them accessible choices for investors looking to start small but smart in the stock market.
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Hydro One
Hydro One (TSX: H) is a compelling option under $50. The stock offers stability, income, and growth. The Canadian utility company is engaged in electric power transmission and local distribution. Thanks to its defensive business model, Hydro One remains relatively immune to economic downturns. Since Hydro One is not involved in power generation, it has no exposure to commodity price fluctuations. This adds operational stability, enabling it to consistently grow its earnings.
Over the past five years, Hydro One stock has soared more than 90%, delivering an impressive average annualized return of around 14%.
Hydro One’s strong balance sheet and cash flows support strategic investments in upgrading aging infrastructure without external equity funding, ensuring financial stability. Further, the utility company enhances shareholders’ value through consistent dividend growth. Since 2016, Hydro One has steadily increased its dividend, driven by its low-risk earnings base and strong cash flows.
The company projects its rate base to increase at a compound annual growth rate (CAGR) of 6% through 2027. The expansion of the rate base will boost its earnings and enable it to increase its dividends.
CES Energy Solutions
CES Energy Solutions (TSX: CEU) is another compelling Canadian stock trading under $50. The company manufactures advanced chemical solutions for the energy sector. Shares of CES Energy have jumped over 118% in one year, led by stable upstream activity and higher demand for its offerings. Meanwhile, the momentum is expected to continue, driven by the growing adoption of advanced consumable chemical solutions and the heightened service intensity.
With operations spanning major North American basins, CES Energy is experiencing increased demand for its specialized solutions due to the rising complexity of oil and gas extraction. As operators adopt techniques like longer lateral drilling, enhanced hydraulic fracturing, and pad optimization to boost output and efficiency, the company’s production and drilling chemicals will likely witness strong demand, supporting financial growth.
CES Energy is well-equipped to benefit from the rising demand for drilling fluids and production chemicals. Its asset-light business model enables resilience amid industry cycles. Additionally, the company’s strong balance sheet and minimal reinvestment requirements provide steady cash flow and long-term growth potential.
5N Plus
Investors looking for top-quality under $50 stocks can consider 5N Plus (TSX: VNP). The company produces and markets specialty semiconductors and performance materials. Its stock has jumped over 204% in three years. Further, it has more room to run.
5N Plus supplies its products to several high-growth industries, including terrestrial renewable energy, space solar power, health and pharma, technical materials, and imaging and sensing. Its target markets provide a solid base for multi-year growth. It is also a leading supplier of ultra-high-purity semiconductor compounds outside China, giving it a competitive edge.
The company’s performance materials segment generates high profitability and predictable cash flows, which will contribute to the company’s financial stability. The demand for renewable energy solutions and space-based solar power technologies is growing and will likely drive its revenues in the coming quarters. Moreover, applications of its offerings in medical imaging and sensing bode well for future growth.
In addition, 5N Plus’s focus on long-term customer partnerships and product expansion augurs well for long-term growth.
