Any amount of money is a good starting place for investors to begin compounding their wealth today for their big, beautiful futures. For those starting with $2,000 right now, there are likely many questions about which direction to go in.
Is it best to put all this capital into one diversified exchange-traded fund (ETF), or buy a handful of stocks with this money and start chipping away at building one’s own well-diversified portfolio?
For those in the latter camp, or those who want to hold a large ETF base and nibble around the edges, here are two top Canadian stocks I think are worth buying with $2,000 (and adding to over time).
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Fortis
Canadian utility company Fortis (TSX: FTS) is one of the top dividend stocks on my watch list, and one I think could provide some of the best returns for investors with a time horizon of a decade or longer.
Much of that has to do with Fortis’s current dividend yield of 3.6% and the company’s rather rapid dividend growth rate over the long term. Growing its dividend at a 6-7% clip for decades now, Fortis has become one of those perennial dividend compounders that’s hard to find in the market.
But aside from its five-decade-long dividend-growth track record, Fortis also has one of the best balance sheets in its sector, spurred by solid growth drivers. As electrification trends continue, and AI and machine learning (among other technologies) continue to suck up a tremendous amount of power, companies like Fortis will bridge that gap. The key is that they’ll earn massive profits doing so.
I expect most of these profits to ultimately end back up in the hands of investors through higher dividends and stock buybacks over time. For those who want a piece of the action, it’s not too late to get started.
Shopify
Now, for a stock that’s about as far from a mature dividend stock as they come. I’d put Shopify (TSX: SHOP) in the high-growth bucket, one of the few mega-cap tech stocks Canada has to offer that should deliver incredible growth over the long term.
One of the key statistics that really stood out to me from reading the Black Friday post-mortems from a number of outlets is that e-commerce sales skyrocketed year over year on this day, increasing by more than double digits. This growth came at the expense of bricks-and-mortar retail, which grew a measly 3%.
Depending on whether you trust the inflation data or not, that sort of increase really hasn’t kept up with inflation (these retail sales numbers typically aren’t adjusted for inflation). Thus, folks are pulling back on going shopping at physical stores but ramping up their online spending.
Those who want to capitalize on these solid trends that have been in place for many years may look to do so via Shopify. The company’s world-class platform for businesses of all sizes to set up online shops should continue to see robust growth driven by these trends. That’s my bull thesis right now, at least.
