Yahoo Finance Beginning Investors: 3 TSX Stocks I’d Buy With $500 Right Now
Written by Kay Ng at The Motley Fool Canada
For new investors, there’s a game-changing way to invest with minimal cost – $0 trading fees on platforms like Wealthsimple. By avoiding hefty fees, you can boost your investment returns. Here are three TSX stocks I’d snap up in a heartbeat today.
Why TD Bank stock is a must-buy right now
If I didn’t already own a sizeable stake in Toronto-Dominion Bank (TSX:TD), I’d jump at the chance to invest $500 today. TD Bank has a strong footprint in Canada and the United States. Its impressive track record speaks volumes: since 2010, it’s delivered a compound annual growth rate (CAGR) of nearly 11% in revenue per share, translating to over 6% annual earnings-per-share (EPS) growth and a 9% boost yearly in dividends.
The blue chip stock has essentially traded sideways since mid-2022, creating a prime buying opportunity for the long haul. Trading at $80.16 per share with a price-to-earnings ratio of about 10, TD stock is priced 14% below its historical norm. Coupled with a solid dividend yield of nearly 5.1%, it’s an attractive choice for stable returns.
Why CN Rail stock should be your next $500 investment
Canadian National Railway (TSX:CNR) is a standout choice for your next $500 investment. Despite the economic ups and downs, CN Rail has consistently excelled. As a top North American operator with a vast and efficient rail network, CN has achieved an impressive CAGR of 8.5% in revenue per share from 2010 to 2023. This has led to EPS growth of 10.8% and dividend growth of 14.6% annually in the period.
Currently, CN Rail stock is down more than 10% from its 52-week high. At $159.77 per share and trading at about 21 times adjusted earnings, it offers a 2.1% yield and a reasonable valuation with solid growth potential.
Brookfield Infrastructure: A top utility stock for wealth creation
Brookfield Infrastructure Partners L.P. (TSX:BIP.UN) is a buy-hold-and-buy-more stock. With a diversified portfolio of essential infrastructure assets across utilities, transport, midstream, and data, it is well-positioned to benefit from long-term, mega-growth trends.
Over the last decade, a $10,000 investment in BIP.UN would have transformed to approximately $38,600, beating both the utility sector and the Canadian stock market, as shown in the graph below.
BIP.UN, XUT, and XIU Total Return Level data by YCharts
Imagine making even more money, in the long run, if you bought more shares on meaningful market corrections.
The top Canadian utility stock is set up for continuous success, driven by strategic capital allocation, operational expertise, and ownership of cash-cow assets. Its growing cash distributions are a key component of investor returns.
For your reference, its 10-year cash distribution growth rate is 8.3% per year. Today, BIP.UN starts you off with a yield of 5.2%. And going forward, it aims to raise its cash distribution by 5-9% per year.
The Foolish investor takeaway
These three Canadian stocks have strong fundamentals and trade at good valuations. With their proven track records, growing dividends, and promising growth, they represent ideal opportunities for beginning investors to build their portfolios today.
The post Beginning Investors: 3 TSX Stocks I’d Buy With $500 Right Now appeared first on The Motley Fool Canada.
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Fool contributor Kay Ng has positions in Brookfield Infrastructure Partners, Canadian National Railway, and Toronto-Dominion Bank. The Motley Fool recommends Brookfield Infrastructure Partners and Canadian National Railway. The Motley Fool has a disclosure policy.
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