The market is full of great long-term options for growth and income seekers. Even better, a handful of the best Canadian stocks can be purchased with as little as $1,000.
Here’s a look at a trio of the best Canadian stocks to buy now that fit any portfolio, given that $1,000 initial budget.
Source: Getty Images
Start with a big bank stock
One of the best Canadian stocks for any portfolio is Bank of Nova Scotia (TSX: BNS). Scotiabank isn’t the largest of the big bank stocks, but it does offer several reasons for investors to consider buying now.
Those major points include Scotiabank’s favourable valuation, particularly when compared to its peers. As of the time of writing, the stock trades at a forward price-to-earnings (P/E) of just 12.64. This makes Scotiabank a value-oriented option.
When factoring in Scotiabank’s long-term potential and dividend, it makes the bank one of the best Canadian stocks to own.
Scotiabank’s long-term growth is focused on international markets. In recent years, the bank shifted away from more volatile Latin American markets to more mature markets in North America.
That growth potential complements Scotiabank’s impressive quarterly dividend. The bank has been paying out dividends for well over a century without fail, with annual upticks going back over a decade.
As of the time of writing, Scotiabank’s dividend carries a yield of 4.35%. This means investors considering Scotiabank as one of the best Canadian stocks to buy with $1,000 can purchase approximately 10 shares of the bank.
That’s not enough to retire on, but it is enough to begin accumulating shares in one of Canada’s best stocks.
Bolt on a telecom with potential
Canada’s telecoms offer investors tasty dividends, reliable revenue, and some growth potential. Telus (TSX: T) is one of the big telecom stocks that has made headlines recently due to its decision to freeze its long-standing semi-annual dividend increases.
That decision came in the most recent quarter, where Telus announced it was freezing that growth cadence. The company hasn’t yet decided to slash its popular quarterly dividend. The company did, however, announce plans to scale down its discounted dividend-reinvestment plan.
As of the time of writing, the yield on that dividend still carries an insane 9.04% yield. At that rate, even if the dividend were to be slashed by 50% (unlikely), Telus would still have one of the best yields on the market.
The focus now is on Telus’ efforts to reduce debt and increase free cash flow.
Finally, prospective investors should know that Telus isn’t just another telecom. The company is also becoming a growth pick through its Telus Health and Telus International ventures. Those areas provide digital services to different segments of the market and internationally.
In short, while Telus is pausing its dividend, the company is still growing, still investing, and still a viable long-term pick. For those investors with $1,000 to drop into Telus, that initial investment will generate several shares from reinvestments alone.
In other words, Telus isn’t just one of Canada’s best stocks; it’s a long-term gem that’s on sale right now.
You need this cash flow engine
One final pick for investors seeking the best Canadian stocks to own is Canadian Natural Resources (TSX: CNQ). Canadian Natural Resources is one of the largest independent oil and gas producers globally. The company has a presence not only in Canada but also in Europe and Africa.
Canadian Natural’s focus is on upstream operations, specifically exploration and production, but the company also owns select midstream infrastructure.
That unique mix of operations makes the company a massive generator of free cash flow, which helps it to pay its juicy 5.38% yield and frequently undertake buybacks.
The nature of its operations also means it boasts a long reserve life with low breakeven costs. In other words, once operations begin, costs drop significantly, making the company even more profitable.
In short, this is handily one of the best Canadian stocks to own now for long-term growth and income generation.
The best Canadian stocks to buy
No stock is without risk, including the trio of options mentioned above.
In my opinion, one or all of the above should be core holdings in any well-diversified portfolio.
Buy them, hold them, and watch your future income grow.
