When it comes to high-quality Canadian stocks to buy for your portfolio, there’s no question that Shopify (TSX: SHOP) is consistently one of the most popular names that gets considered.
Shopify is one of the country’s biggest tech success stories, and its stock price has delivered massive gains in the past that have caught the attention of investors all over the world.
However, although Shopify has a lot going for it and still has growth potential over the long haul, it’s not necessarily the easiest stock for beginners to own.
Shopify and other tech stocks like it operate in fast-moving, highly competitive industries, which makes it more complicated to follow and harder to put a value on than a straightforward business, such as a large-cap blue-chip.
Furthermore, high-potential tech stocks like Shopify tend to be highly volatile, and this volatility can be particularly intimidating for beginner investors.
Not to mention that predicting Shopify’s growth trajectory can be quite complex, considering its success relies on a combination of broader economic trends, consumer spending habits, and global e-commerce competition.
So, although Shopify is still a high-quality company, it’s not necessarily the ideal stock for beginner investors who are just starting out.
If you’re new to investing, there are plenty of companies that offer the same level of quality but are easier to understand and more reliable to buy now and hold for the long haul.
So, if you’re just starting out and looking to build a portfolio of high-quality but also reliable and easy-to-understand stocks, here are three of the best on the TSX.
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Two of the most defensive stocks to buy over Shopify
If you’re looking for high-quality but simple-to-understand businesses you can buy and hold for the long haul, two of the best are Fortis (TSX: FTS) and Enbridge (TSX: ENB).
Fortis is about as straightforward as it gets for Canadian investors, and therefore unsurprisingly, it’s also one of the most popular dividend stocks you can buy.
Fortis is ideal because it’s one of the largest regulated utility companies in North America, and utilities are essential services, meaning Fortis provides a product people rely on every single day, no matter what’s happening in the economy.
Therefore, since it offers essential services and its industry is regulated by the government, Fortis’ future earnings tend to be highly predictable.
That predictability not only makes it easier to understand and better to own for beginner investors, but it also makes the stock much less volatile than a company like Shopify.
In fact, Fortis’ business is so reliable that it has increased its dividend for 50 consecutive years, the second-longest streak in Canada and an incredible track record that shows how reliable its business really is.
Meanwhile, Enbridge is similar in a lot of ways. Although less of its business is regulated by the government, it too provides essential services and is crucial to the functioning of the North American economy.
Furthermore, the energy infrastructure industry has massive barriers to entry, meaning there’s little risk of new competitors suddenly taking market share.
That stability translates to reliable cash flows, which is why Enbridge is able to pay one of the most attractive dividends in the country. ENB stock also has a lengthy dividend growth streak that’s lasted 30 years, making it another stock beginner investors should consider over Shopify.
A top Canadian real estate stock
In addition to simple defensive businesses, another high-quality stock to consider over Shopify is Canadian Apartment Properties REIT (TSX: CAR.UN).
Canadians love to invest in real estate. For many, owning rental properties is the dream. That’s why CAPREIT, as it’s known, is one of the best stocks for new investors to buy now.
It’s one of the largest residential real estate investment trusts in the country, owning and managing thousands of rental units across Canada.
Therefore, because residential real estate is one of the most defensive industries in the economy, not only is CAPREIT a reliable investment, it’s easy for new investors to understand.
Furthermore, investors can also learn about residential real estate and benefit from exposure to the sector without the hassle of being landlords themselves.
So, if you’re looking to get started putting your hard-earned capital to work, I’d start with a reliable and simple business first over a high-risk, high-reward stock like Shopify.
