The last few years have made stock market investing far different from what many investors might have anticipated, owing to geopolitical factors that Canadians cannot control. The United States and its consistently inconsistent tariff dealings have made the Canadian government wary of relying too much on its largest trading partner.
The government now plans to invest in defence, infrastructure, and railways, all to negate the impact that decisions made in the US can have on the Canadian economy. The government’s nation-building budget means more money will flow into several sectors of the economy.
If you have been looking for stocks to invest in right now, here are two to keep on your radar for potential additions to your self-directed Tax-Free Savings Account (TFSA) portfolio.
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Canadian National Railway
Canadian National Railway (TSX: CNR) is the national flag-carrying railway company of Canada. The $82.9 billion market-cap railway operator has a network spanning from one coast to the other, extending south through Chicago, all the way to the Gulf of Mexico. The company’s extensive railway network is vital to the North American economy, transporting billions of dollars worth of goods each year across over 19,600 miles of track.
The government’s decision to diversify export partners may require improvements in railway infrastructure and the development of new connections to Canadian ports. The moves will be capital-intensive. While it might take time to see the improvements bear fruit, CNR is well-capitalized enough to fund them and continue paying investors their dividends. As of this writing, CNR stock trades for $134.71 per share and boasts a 2.6% dividend yield.
Descartes Systems Group
Descartes Systems Group (TSX: DSG) is another stock to consider investing in right now, but for different reasons. The $10.7 billion market-cap company is a software solutions provider for the shipping industry. The company’s offerings let its clients in the shipping industry streamline communication. Its transaction-driven Global Logistics Network sets the company up to upsell additional software models to clients through a Software-as-a-Service (SaaS) model.
The tech stock plays a crucial role in global logistics, making the overall system better. This is a need that will only grow in the coming years, letting DSG stock benefit significantly in the long run. In turn, the company’s growth can drive shareholder value, making it an excellent investment to consider for long-term wealth growth. As of this writing, DSG stock trades for $124.83 per share.
Foolish takeaway
The S&P/TSX Composite Index is up by 29.6% year-to-date. In the same period, CNR stock is down by 8.2% and DSG stock is down by 23.7%. Considering that the rest of the market is going through a bull run, these two stocks might start seeing share prices soar to higher levels. Now might be the best time to add the stocks to your holdings and capitalize on recovering share prices and substantial long-term returns.
