Getting started in Canadian markets can be a daunting task, especially for new investors. Thankfully, it doesn’t need to be scary at all for those new to the Canadian markets.
And there are plenty of great investments to choose from for all types of investors who are just getting started in Canadian markets.
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Start with a great defensive stock
The first step to building a portfolio for those new to Canadian markets is a defensive option, such as Fortis (TSX:FTS). Defensive stocks such as Fortis can provide a stable, growing income source while also offsetting market volatility.
Part of the reason for that is the reliable business model that utilities like Fortis adhere to.
In short, Fortis provides a service for which it is compensated. That compensation is outlined in long-term, regulated contracts that span decades.
In other words, for as long as Fortis continues to provide utility services, the company generates a stable revenue stream that leaves room for both investing in growth and paying out a handsome dividend.
In the case of Fortis, the company is one of the largest utility stocks in North America, and that dividend works out to a juicy 3.8%. This means that even a $2,000 investment in Fortis today will generate an additional share through reinvestments every year.
Add in additional investments over time, and that nest egg will grow even quicker.
Even better, Fortis has provided annual upticks to that dividend for over 50 consecutive years. This fact alone should make Fortis a solid contender for any investor getting started in Canadian markets.
Diversify with this stellar retail-landlord REIT
REITs represent another superb option for investors new to Canadian markets. Not only do REITs adhere to a lucrative model that is a lower-risk version of a landlord, but they are required to pay out handsome dividends!
The REIT for investors to consider right now is Slate Grocery REIT (TSX:SGR.UN). Slate is a grocery-anchored REIT that boasts a portfolio of over 100 properties in the U.S. market.
Slate’s tenant mix is comprised of some of the largest names on the market, and they generate a stable revenue stream for the REIT. This in turn allows Slate to invest in growing its massive portfolio and paying out its distribution.
That distribution is paid out every month, much like a landlord collecting rent. As of the time of writing, Slate’s monthly distribution carries an insane yield of 8.1%.
Investing just $1,500 of an initial $5,000 into Slate will earn enough through reinvestments to generate no less than 8 additional shares in just the first year.
Long-term investors who reinvest those distributions and let that investment grow on autopilot for a decade or more will earn significantly more.
In other words, if you’re just starting to invest in Canadian markets, Slate is very hard to ignore.
How about a defensive option that also offers an insane yield?
If Fortis provides the defensive appeal and Slate provides a high yield, this next stock can provide both. Specifically, I’m referring to one of Canada’s big telecom stocks, Telus (TSX:T).
Telecoms boast defensive appeal thanks to their core subscriber-based segments. That includes wireless, wireline, Internet and TV services, all of which have grown in importance since the pandemic ended.
In short, the segments provide a reliable and recurring revenue stream that allows for Telus to invest in improvements, which in turn results in attracting more customers from its competitors.
Turning to dividends, T stock offers a quarterly dividend that pays out a juicy 7.5% yield. A $1,500 investment in Telus will generate a handful of shares through reinvestments alone each year.
And like Fortis, Telus has provided annual or better upticks to that dividend going back two decades without fail.
Invest in Canadian markets today
No stock is without risk, but the three stocks mentioned above can provide some defensive appeal to offset that risk. They also offer a tasty dividend, which can morph into a very handsome income stream over the longer term.
In my opinion, one or all of the above should be core holdings in any well-diversified portfolio.
