The market this year can be summarized in a single word: volatile. And that market volatility has some investors waiting rather than investing in what are otherwise stellar Canadian stocks.
Fortunately, there are great options to consider among those Canadian stocks, and here are a few I’d buy with an extra $5,000.
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Buy #1: A defensive stock with huge appeal
When market volatility hits, investors gravitate to safer, defensive investments. Within that defensive basket are traditional investments like precious metals, telecoms and utilities.
Speaking of utilities, investors looking for great Canadian stocks should consider Fortis (TSX: FTS). Fortis is one of the largest utility stocks on the market, with a sprawling portfolio of sites across North America.
Those facilities generate a recurring revenue stream backed by long-term, regulated contracts that span decades.
Fueling that defensive appeal is the sheer necessity of the service that Fortis offers. That’s because utility service isn’t something that can be traded down during downturn periods.
From an income standpoint, Fortis pays out a generous quarterly dividend. As of the time of writing, the yield on that dividend works out to a juicy 3.67% yield.
Adding to that appeal is the fact that Fortis has provided investors with annual upticks to that dividend for over 50 consecutive years without fail.
Considering a $5,000 outlay into Fortis, prospective investors can expect to generate an income of just over $185. That’s more than enough to let any future income grow on its own through reinvestments.
This fact alone makes Fortis one of the must-have Canadian stocks to buy right now.
Buy #2: The bank that can provide growth and income
Canada’s big bank stocks are always great options to consider for any portfolio. In addition to offering stable revenue and juicy dividends, the banks also boast stellar growth potential in foreign markets.
Bank of Nova Scotia (TSX: BNS) represents a stellar opportunity at the moment for those investors seeking Canadian stocks to own.
Scotiabank isn’t the largest of the big banks, but it does boast significant growth appeal, a stable domestic segment and an insane 6.30% yield. For income investors, that $5,000 initial investment translates into just over $310 income.
And like Fortis, that’s more than enough to generate several shares each year through reinvestments. This makes it a solid option for any well-diversified portfolio.
Turning to growth, Scotiabank has a reputation as being Canada’s most international bank. Scotiabank’s international presence includes a focus on high-growth Latin American markets as well as a growing emphasis on the U.S. market.
That growth augments Scotiabank’s consistent earnings from its domestic segment, leaving room for investment and that juicy dividend. That makes Scotiabank one of the must-have Canadian stocks to line any portfolio.
Buy #3: Telus
The third on the list of Canadian stocks for investors to buy with just $5,000 is Telus (TSX: T). Like its big telecom peers, Telus offers core subscription-based services across multiple segments.
Those segments include wireline, TV, internet and wireless units, and the latter two have provided significant growth in recent years.
One difference from its telecom peers is that Telus lacks a media segment. While this means the company misses out on a source of ad revenue, it does mean that Telus can focus on its core segment.
That being said, Telus has branched out into other areas, specifically into offering digital services. Those services are in key areas such as agriculture and health, providing a growing source of revenue for the company.
Turning to income, Telus offers an insane 7.70% yield and has a well-established cadence of providing investors with annual or better upticks to that dividend going back over a decade.
Using that same $5,000 example, investors can expect to generate more than a few shares of Telus through reinvesting the expected income of nearly $390.
In short, Telus is one of the great Canadian stocks to buy and forget.
Buy these Canadian stocks now
No stock is without risk, and that includes even the most defensive picks. Fortunately, the three Canadian stocks mentioned above can provide a growing income along with some defensive appeal.
In my opinion, one or all of the above should be core holdings in any well-diversified portfolio.
Buy them, hold them, and watch your future income grow.
