Investors who are looking to put their next $1,000 to work have plenty of options to choose from right now. Of course, the stock market is a great place for investors to consider putting capital to work long-term. Equities have shown higher returns over the very long haul, and provide inflation protection for those looking to increase their standard of living over time and have an enjoyable retirement.
That said, given where interest rates are right now, there are plenty of other options to consider in the fixed-income world. Whether we’re talking about bonds or other alternative assets, it’s true that there are now some viable alternatives out there in the market.
That said, for those investing for retirement or other long-term goals, finding the right dividend stocks that fit one’s personal risk tolerance and return goals can be a meaningful tool to be utilized.
Here are two top TSX stocks I’d put in the “no-brainer” bucket for those looking to invest right now.
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Manulife Financial
Regardless of your personal feelings about where the market may be headed over the near term (say, one year or less), over the long term, insurance companies have been a solid long-term bet. Manulife Financial (TSX: MFC) is one such company I’ve continued to pound the table on in recent years, and that’s turned out to be a solid call.
Now, much of my previous bullish call on Manulife had to do with the fact that this stock has been inherently undervalued for some time. While some of that valuation discrepancy has gone away, MFC stock still trades at a price-to-earnings multiple of just 15 times earnings.
Compared to where the market is trading today, that seems like a very reasonable multiple for a company still in growth mode (and which carries a 3.7% dividend yield).
Shopify
Moving to the other end of the risk/reward spectrum, Shopify (TSX: SHOP) has certainly been a much more volatile name than Manulife in recent months and years, as the chart below shows.
That said, I’d argue that this volatility is probably warranted, given Shopify’s higher growth rate and its ability to either blow out earnings (or greatly disappoint the market).
I think long-term investors can take comfort in the fact that Shopify has some very robust underlying growth catalysts supporting its valuation. Over the long term, I think that e-commerce sales will make up a greater and greater percentage of the overall market, with Shopify providing the key technological infrastructure to support this movement.
If you’re in this camp, I think Shopify still makes sense to add, even at current levels. I’d like to see a bit more of a pullback personally before pulling the trigger. But this is a company I think can easily make new all-time highs over time, and continue to grow in a way few other TSX growth stocks can.
