Canada has diverse companies across various sectors, presenting ample investment opportunities for both Canadian and foreign investors. Identifying the best stocks to buy in Canada right now is crucial, given market instability and concerns about a potential economic downturn. Cash flow, revenue growth, PE ratio, dividend yield, and overall performance indicators are vital in determining the top stocks.
Some of the seven best Canadian stocks to buy right now include the Royal Bank of Canada, Canadian National Railway, Bank of Montreal, BCE Inc, Enbridge Inc, Shopify, and The Toronto-Dominion Bank. These companies exhibit strong financial performance, market presence, and growth potential. They include names in the Canadian Dividend Aristocrats list, making them attractive options for investors looking for both growth and income.
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Canada has a diverse range of companies in the energy, finance, precious metals, and technology sectors. With the current market instability and concerns about a potential economic downturn, Canadian evergreen stocks are becoming more attractive to investors.
When searching for the best Canadian stocks on the Toronto Stock Exchange (TSX), investors should consider factors like cash flow, revenue growth, PE ratio, dividend yield, and other performance indicators. In this article, we will explore 7 of the best stocks to buy right now in Canada.
What Are The Best Stocks To Buy In Canada Right Now?
There are over 1,500 companies currently listed in the Toronto Stock Exchange. We went through hundreds of the most promising stocks and shortlisted the top 7. Here are our top picks:
- #1 Royal Bank of Canada
- #2 Canadian National Railway
- #3 Bank of Montreal
- #4 BCE Inc
- #5 Enbridge Inc
- #6 Shopify
- #7 Toronto Dominion Bank
Here's a summary of the most important indicators to help you choose the best Canadian stocks to invest in.
|Stock||Ticker||Sector||Market Cap||PE Ratio||Dividend Yield||Founded|
|Royal Bank of Canada||RY.TO||Financial||$176.789B||12.10||4.15%||1864|
|Canadian National Railway||CNR.TO||Railway||$108B||19.97||1.98%||1919|
|Bank of Montreal||BMO.TO||Financial||$82.975B||5.90||4.85%||1717|
|BCE Inc||BCE.TO||Telecommunication||$ 57.861B||22.57||6.10%||1983|
|Enbridge Inc||ENB.TO||Pipeline||$ 101.376B||42.43||7.09%||1949|
|Shopify||SHOP.TO||eCommerce Software||$ 103.663B||N/A||N/A||2006|
|The Toronto Dominion Bank||TD.TO||Financial||$ 150.556B||9.95||4.67%||1955|
We will now look at each stock independently to evaluate its specific features.
#1 Royal Bank Of Canada
Royal Bank of Canada is a diversified financial service company. It's one of the best Canadian stocks to buy and hold. It's the largest bank in terms of market value and serves over 17 million customers.
RBC operates globally, offering various financial services and serving clients in the United States and 27 other countries. With a 157-year history and a consistent track record of stability, it's easy to see why the Royal Bank is one of the top Canadian bank stocks today.
Features Of The Royal Bank Of Canada
- Strong financial performance: RBC has a long profitability and dividend growth history. In the past five years, RBC has generated an average annual return on equity of 18.6% and has increased its dividend by an average of 10% per year.
- Diversified business: RBC operates in various industries, including retail banking, commercial banking, wealth management, and capital markets. This Diversification helps to reduce risk and provides the company with a steady stream of revenue.
- Strong brand recognition: RBC is one of Canada's most well-known and respected banks. This strong brand recognition gives the company a competitive advantage in attracting and retaining customers.
- Global reach: RBC has a strong presence in Canada and the United States and is expanding its operations worldwide. This global reach gives the company access to new markets and growth opportunities.
Pros Of Royal Bank Of Canada
- Has a solid track record of financial performance, with consistent profitability and dividend growth.
- Diversified within the financial industry, including retail and commercial banking, wealth management, and capital markets.
- A strong brand reputation gives it a competitive advantage.
- Global reach.
- High-quality educational tools.
Cons Of Royal Bank Of Canada
- Economic and market risks
- Intense competition
- Current Share Price: $127.19 (as of May 19)
- PE Ratio: 12.10
- Dividend Yield: 4.15%
- 52-week Trading Range: $116.75 – $140.18
RBC is ideal for beginners looking for a well-established and financially sound company with a strong profitability and dividend growth track record.
#2 Canadian National Railway
Canadian National Railway is the biggest railway in Canada in terms of market capitalization and network size, with tracks spanning approximately 32,831 km from Nova Scotia to British Columbia. Its stock is listed on both the TSX and NYSE and is a significant part of the S&P/TSX 60 index.
The company offers various services, including rail, intermodal, trucking, business development, and supply chain services.
As of December 2, 2022, the Bill & Melinda Gates Foundation Trust holds the largest ownership stake in the Canadian National Railway Company, valued at over $5.9 billion.
- It has a market capitalization of $108 billion, indicating its size and significance within the railway industry.
- Dual-listed on the TSX and NYSE, providing Canadian and international investors access.
- The core component of the S&P/TSX 60 index reflects its importance in the Canadian stock market.
- CNR.TO is recognized as a Canadian Dividend Aristocrat, indicating its track record of consistently increasing dividend payments to shareholders over time.
- It has an extensive rail network that contributes to potential business opportunities and revenue growth.
- Strong market leadership can translate into competitive advantages, customer trust, and potential growth opportunities.
- Strong market capitalization
- Strategic shareholders who may contribute to investor trust
- Relatively low dividend yield
- Vulnerability to economic conditions
- Regulatory and environmental risks
- Current Share Price: $161.39 (as of May 19)
- PE Ratio: 21.61
- Dividend Yield: 1.98%
- 52-week Trading Range: $137.26 – $175.39
Canadian National Railway stock is best for long-term investors due to its stability and establishment in the railway industry, making it an attractive choice for investors looking for consistent growth and potential capital appreciation over time.
#3 Bank Of Montreal
The Bank of Montreal is a multinational investment bank headquartered in Canada. It offers various financial services, including travel, credit cards, mortgages, investments, loans, and financial planning.
Founded in 1817, the Bank of Montreal is the oldest bank in Canada and currently ranks as the country's third-largest bank, following Toronto Dominion and the Royal Bank of Canada.
The bank has a remarkable record of paying dividends to its investors since 1829, making it one of the longest global dividend-paying streaks. As of 2022, the Bank of Montreal boasted over 12 million customers worldwide and managed assets worth over $884 billion.
- Diversified Revenue Streams: BMO operates across various business segments, including commercial and personal banking, wealth management, and investment banking.
- Stability and Resilience: BMO is one of Canada's largest and most established banks, known for its stability and resilience. Its long-standing history and strong presence in the Canadian financial sector can appeal to investors seeking a reliable investment option.
- Offers a range of account options: The accounts are tailored to meet the needs of different investors, whether you're saving or investing
Pros Of Bank Of Montreal
- Well-capitalized company with an appealing dividend yield
- Convenient access to your accounts and portfolios through online platforms
- A long history of peer-leading risk management performance
- Diversified businesses that continue to deliver consistent and robust earnings growth
- Constant dedication to positive operating leverage
Cons Of Bank Of Montreal
- Exposure to economic and market risks
- Regulatory and compliance risks.
- Potential loan and credit risks.
- Current Share Price: $161.39 (as of May 19)
- PE Ratio: 5.90
- Dividend Yield: 4.85%
- 52-week Trading Range: $113.47 – $138.85
Bank of Montreal is best for long-term investors due to its diversified revenue streams and consistent earnings growth. Its commitment to positive operating leverage and strong risk management performance further enhance its potential as a long-term investment.
#4 BCE Inc
BCE is the largest telecommunications company in Canada, offering TV, phone, and internet services to all households nationwide. Investing in essential service providers is generally wise because their demand remains constant regardless of circumstances. BCE is listed on the TSX and the NYSE and included in the S&P/TSX 60 index.
BCE also owns various significant Canadian subsidiaries, such as ownership shares in the Maple Leaf Sports and Entertainment and Montreal Canadiens. BCE is also a Canadian dividend aristocrat and has consistently increased its dividend payout at a compound annual growth rate (CAGR) of 5%.
Given our heavy reliance on daily stable network connections, BCE's customer base is expected to grow. Consequently, BCE has emerged as a favourite among the best growth stocks in Canada. At present, the stock provides shareholders with a 6.10%yield.
- Largest Telecommunications Company: BCE is the largest telecommunications company in Canada, providing TV, phone, and internet services to households nationwide.
- Diversified Subsidiaries: BCE owns significant Canadian subsidiaries, including ownership shares in Maple Leaf Sports and Entertainment and the Montreal Canadiens.
- Canadian Dividend Aristocrat: BCE is recognized as a Canadian dividend aristocrat, consistently increasing its dividend payout at a CAGR of 5%.
- Dual Listing and Inclusion in Index: BCE is listed on both the TSX and the NYSE. It's also included in the S&P/TSX 60 index.
Pros Of BCE
- Constant demand for its telecommunications services
- BCE's consistent increase in dividend payout makes it appealing to income-oriented investors.
- Significant market presence and competitive advantage.
- BCE's inclusion in the S&P/TSX 60 index makes it an attractive investment option for potential capital appreciation.
Cons Of BCE
- Being in the telecommunications industry, BCE is subject to regulatory changes and potential government interventions, which can impact its operations and profitability.
- Rapid advancements in technology and increasing competition in the telecommunications sector pose challenges for BCE to stay ahead.
- BCE's performance is closely tied to the overall economic conditions, and any downturn may affect its financial performance.
- Current Share Price: $ 63.43 (as of May 19)
- PE Ratio: 22.57
- Dividend Yield: 6.10%
- 52-week Trading Range: $55.66 – $69.44
It's best for dividend investors looking for regular income. It's also risk-averse investors since it's an essential service provider, and its inclusion in a major index provides some level of stability.
#5 Enbridge Inc
Enbridge Inc. is an energy company based in Canada. It owns and operates an extensive pipeline network transporting natural gas and crude oil across Canada and the United States.
The company's stock is listed on the TSX and NYSE exchanges and included in the S&P/TSX 60 index. Enbridge's pipeline system is the longest in North America, spanning over 27,500 km for crude oil and over 38,300 km for natural gas.
Enbridge is known for offering one of the highest dividend yields among large corporations in Canada, currently providing investors with a generous annualized yield of 7.09%.
Features Of Enbridge
- Extensive Pipeline Network: Enbridge owns and operates an extensive pipeline network across Canada and the United States.
- Dual Listing and Inclusion in Index: Enbridge's stock is listed on both the TSX and NYSE, providing investors with options for trading.
- High Dividend Yield: Enbridge is known for offering one of the highest dividend yields among large corporations in Canada.
Pros Of Enbridge
- Proven investment track record.
- Low-risk business model.
- High dividend income.
- Strong Pipeline Infrastructure.
Cons Of Enbridge
- Regulatory and Environmental Risks.
- Dependence on Energy Prices.
- Capital-Intensive Operations.
- Current Share Price: $ 50.07 (as of May 19)
- PE Ratio: 42.43
- Dividend Yield: 7.09%
- 52-week Trading Range: $48.88 – $59.69
Enbridge is best for income-oriented investors who prioritize high dividend yields. With one of the highest dividend yields among large corporations in Canada (currently at 7.09%), Enbridge provides a consistent and generous dividend income.
Shopify Inc., based in Ottawa, Ontario, is a multinational e-commerce company. It has over 1,700,000 businesses in around 175 countries. Retailers can use Shopify's software to create, manage, and market their products across various channels, including social media, online and mobile storefronts, marketplaces, and physical retail locations.
Shopify's stock is listed on the TSX and NYSE and included in the S&P/TSX 60 index. Being a vast store where you can find almost anything, it's no surprise that Shopify is considered one of the top Canadian stocks to buy and hold.
Features Of Shopify
- Dual Listing: Shopify is dual-listed on both the Toronto Stock Exchange (TSX) and the New York Stock Exchange (NYSE), providing accessibility and flexibility for investors.
- Inclusion in the S&P/TSX 60 Index: Shopify is included in the S&P/TSX 60 Index, which consists of leading Canadian stocks, enhancing its visibility and potential investor interest.
- Canadian Market Presence: Shopify, headquartered in Ottawa, Ontario, maintains a strong presence in the Canadian market. This allows Canadian investors to support a homegrown success story and potentially benefit from its growth.
Pros Of Shopify
- Support for a Wide Range of Businesses.
- Diversified revenue streams from various sources.
- Global presence and opportunities for international expansion.
- Low Startup Costs.
- Dual listing and index inclusion increase visibility and attractiveness to investors.
Cons Of Shopify
- High valuation may deter value-focused investors.
- Dependence on small and medium-sized businesses.
- Regulatory and legal risks associated with operating globally.
- Current Share Price: $ 81.31 (as of May 19)
- 52-week Trading Range: $33.00 – $87.53
It's ideal for investors seeking growth opportunities. The company's support for various businesses and diversified revenue streams contribute to its growth potential.
#7 The Toronto-Dominion Bank
The Toronto-Dominion Bank, headquartered in Toronto, is a global banking and financial services provider. Due to its large scale, the company enjoys higher margins compared to many of its competitors, positioning it as one of the top Canadian stocks suitable for long-term investment.
The stock is listed on both the TSX and NYSE exchanges and is part of the S&P/TSX 60 index. Additionally, it's included in the list of G-SIBs (Global Systemically Important Banks), and in 2022, it ranked as the 27th largest bank globally.
- Dual Listing and Index Inclusion: The stock of Toronto Dominion Bank is dual-listed on the TSX and NYSE.
- Global Systemically Important Bank: Toronto Dominion Bank is a member of the G-SIBs (Global Systemically Important Banks) list, highlighting its significance in global banking.
- Global Bank Ranking: In 2022, Toronto Dominion Bank was recognized as the 27th largest bank globally, showcasing its global presence and influence.Pros
- Established Reputation.
- Toronto Dominion Bank's significant assets under management demonstrate its stability and financial strength.
- Competitive position.
- Global Systemically Important Bank (G-SIB).
- Intense competition for the position of the top bank in Canada.
- Regulatory challenges.
- Economic sensitivity.
- Current Share Price: $ 82.27 (as of May 19)
- PE Ratio: 9.95
- Dividend Yield: 4.67%
- 52-week Trading Range: $76.40 – $97.13
It's ideal for Canadian Market Investors looking to gain exposure to the Canadian banking industry due to its significant presence and competition for the top bank position in Canada.
So, there you have it, the best TSX stocks in Canada right now. Each of these stocks offers significant potential for growth and profit potential but also comes with a certain level of risk.
When assessing the best Canadian stocks to invest in, look at key metrics such as the dividend yield, price-to-earnings ratio (PE ratio) and revenue growth. These factors provide a good starting point for evaluating investment opportunities.
Before making any investment decisions, it's wise to conduct thorough research independently to ensure you make the right choice.
Best Stocks To Buy In Canada Right Now FAQs
How much money do you need to buy Canadian stocks?
You can start purchasing stocks in Canada with as little as $1. Some have a minimum account balance (e.g., $1,000) or a maintenance/inactivity fee if your account balance is less than $5-25k.
Are Foreigners allowed to purchase stocks in Canada?
Non-residents can buy stocks in Canada through authorized brokers and stock exchange-traded funds (ETFs) domiciled in Canada.
How do I determine the best stocks to invest in Canada?
You can determine the best stocks to invest in Canada by conducting thorough research and analysis. Additionally, it's crucial to consider your investment horizon and risk tolerance before you make any investment decisions.
What factors should you consider when choosing the best stocks to buy in Canada?
When selecting the best stocks to buy in Canada, consider factors such as the company's financial performance, growth prospects, competitive advantage, industry trends, management team, valuation, and overall market conditions. Conducting thorough research and analysis is vital to make informed investment decisions.