When you’re new to investing, before you even start to think about what Canadian stocks you want to buy for your portfolio, you need to figure out your approach.
It’s essential to figure out the right mix of stocks for your preferences, whether it’s value stocks, growth stocks, dividend stocks, or a combination of the three.
There are several high-quality stocks in Canada, so understanding which businesses fit your portfolio is essential to building the optimal long-term portfolio for your needs.
So, with that being said, here are three of the best Canadian stocks to buy on the TSX and what investors they’re ideal for.
Source: Getty Images
One of the best Canadian stocks to buy for value investors
With the TSX up more than 20% over the last 12 months, many of the best Canadian stocks are trading at or above their fair value. The good news for value investors, though, is that one of the best undervalued stocks in Canada isn’t just a little discounted; it’s trading ultra-cheaply.
Cargojet (TSX: CJT) is a stock that continues to be impacted by macroeconomic headwinds, but its long-term potential makes it hard to ignore.
Cargojet is perfectly positioned to capitalize on the long-term shift toward more online shopping and e-commerce. It has the fleet, the dominant position, and the partnerships in place to see significant growth once the macroeconomic environment improves.
In fact, its forward enterprise value to earnings before interest, taxes, depreciation and amortization (EV/EBITDA) ratio is sitting at just 6.4 times. That’s not just low, that’s well below its five-year average forward EV/EBITDA ratio of 8.9 times.
Furthermore, that’s based on its current estimates for its EBITDA, which are being weighed down by the macroeconomic environment.
So, if you’re looking for value stocks or even growth stocks that are trading cheaply, Cargojet is certainly one of the best stocks Canadian investors can buy now.
A top defensive growth stock
If you’re an investor who wants growth but with a bit more reliability, Jamieson Wellness (TSX: JWEL) is one of the best Canadian stocks to buy now.
You’ve probably heard of Jamieson. It’s one of, if not the most popular health and wellness brands in Canada. The company designs, produces, manufactures, and distributes products such as vitamins, minerals, supplements, and more.
This makes Jamieson an incredibly defensive business since the goods it produces are considered essential for many consumers.
Jamieson is still in growth mode, though. That means it offers a smaller dividend, currently yielding just 2.6% and retains more of its earnings to invest in future growth.
So, although it’s a stock that’s safe and reliable, it’s not the most ideal pick if you’re looking for defensive stocks that generate significant passive income.
One of the best dividend stocks on the TSX
For passive income seekers, one of the best Canadian stocks that you can buy now and hold for years is CT REIT (TSX: CRT.UN).
CT REIT is a retail REIT that earns roughly 90% of its income from one of the best-known retail brands in Canada, Canadian Tire. In addition, Canadian Tire is also the majority owner of CT REIT.
Therefore, CT REIT isn’t just one of the most reliable retail REITs you can buy for passive income; it’s one of the best stocks in the entire real estate sector.
Plus, not only does it offer an attractive forward yield, currently sitting at roughly 5.8%, but it has also increased its annual distribution every single year since it went public just over a decade ago.
So, if you’re a new investor looking to boost the yield your portfolio generates, there’s no question CT REIT is one of the best Canadian stocks to buy now.
