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Regardless of how the economy is performing, there are always good Canadian stocks to buy on the Toronto Stock Exchange. Many Canadian investors are worried about a potential global financial crisis due to the rising interest rates.
However, not all stocks are negatively affected by rising interest rates, including many dividend stocks and energy stocks.
The Best Canadian Stocks to Buy
Many of the best Canadian stocks to buy are within the financial sector or the energy sector. Of course, you should conduct your own research, but these top Canadian stocks are a great place to start.
The Canadian stock market is a great place to receive a piece of a Canadian company’s cash flow via dividend stocks and capital gains. If you are looking to buy stocks on the Canadian stock market, you should determine the company’s past performance and future outlook.
1- Barrick Gold Corp.
- Ticker Symbol: ABX.TO
- Market Cap: $34b
- Dividend Yield: 5.37%
Barrick Gold Corporation is a Toronto-based mining company that operates in many of the world’s most prolific gold and copper districts, inserting it comfortably into international markets. These include sites in Mali, Saudi Arabia, and Argentina.
Barrick operates with a sustainability vision for long-term investors, working with their host countries to convert their natural resources into tangible benefits.
In addition, they are well-positioned in the mining sector, operating the Nevada Gold Mines, the single largest gold-mining complex in the world, producing more than 3 million ounces annually.
Barrick has a current market cap of $34B and a P/E ratio of 13.58, in addition to generating almost $2B in free cash flow in 2021, making it one of the top Canadian stocks to buy regarding mining.
2- Enbridge Inc.
- Ticker Symbol: ENB.TO
- Market Cap: $109b
- Dividend Yield: 6.33%
Enbridge Inc. safely connects millions of people around the globe to renewable, reliable, and sustainable sources of energy. They do this through their four core businesses: liquids pipelines, natural gas pipelines, gas distribution/storage, and renewable energy.
They currently move about 30% of the crude oil produced in North America and transport nearly 20% of the natural gas consumed in the United States. By investing heavily in these core businesses, Enbridge Inc. hopes to achieve net zero emissions by 2050. This makes it a reliable long-term investment when considering energy stocks on the Canadian stock market.
Currently, Enbridge has a market cap of $109B and a P/E ratio of 18.72. Additionally, they have seen promising revenue growth as of late, with a 28% increase in annual revenue from 2021 ($37B), making Enbridge one of the more worthwhile growth stocks to buy.
3- Royal Bank of Canada
- Ticker Symbol: RY.TO
- Market Cap: $171b
- Dividend Yield: 4.19%
The RBC is one of Canada’s biggest banks and one of the biggest in the world in terms of market capitalization, serving over 17 million clients in Canada, the United States, and 27 other countries.
The RBS has the largest market cap of all the Canadian stocks on this list and is one of the best Canadian dividend stocks. Their services include personal and commercial banking, wealth management, insurance, investor services, and capital markets products and services globally.
The Royal Bank of Canada currently has a market price of $98.04 and a P/E ratio of 11.63. This makes them the fifth largest North American bank by market cap, as they plan to grow by investing in global markets and serving the needs of both their public, private, and institutional investors.
4- Shopify Inc.
- Ticker Symbol: SHOP.TO
- Market Cap: $50b
- Dividend Yield: N/A
Shopify Inc. is an e-commerce platform that primarily empowers independent business owners worldwide, helping merchants start, manage and grow their businesses. They have millions of clients in 175 countries that have generated over $496B in sales.
Shopify provides tools for independent business owners to manage products, inventory, payments, and shipping. They place a significant emphasis on integration, using a shared platform for all their users and offering banking and capital services to facilitate growth.
The market cap for Shopify currently sits at $50B and is growing rapidly with a very high P/E ratio of 267, making it one of the higher potential growth stocks to buy.
5- Algonquin Power and Utilities
- Ticker Symbol: AQN.TO
- Market Cap: $12b
- Dividend Yield: 5.12%
Algonquin Power and Utilities operate a transmission, generation, and distribution portfolio. Its Regulated Services Group segment managed rate-regulated utilities within the United States, Chile, Canada, and Bermuda. The Renewable Energy Group segment sells and generates electrical energy, capacity, and ancillary products.
The company generates consistent revenue and net income each year. In 2021, its revenue growth grew from $1.6b to $2.2b. Algonquin Power and Utilities also have a strong balance sheet, which helps to make it for its negative free cash flows. Additionally, the company is repurchasing its stock each year, showing it has confidence in the future.
The Best Canadian Stocks: Bottom Line
Whether you are a growth or value investor, the Canadian stock market is full of great companies. Even if the economy is not looking so hot, there are always opportunities to make a profit. If you buy stock in a company that generates net income and positive cash flow, your chances of making money are substantial in the long run.
However, you must understand that the Canadian stock market comes with risks, and every year will not be great. Nevertheless, if you are willing to invest for decades at a time and refrain from selling your investments, you can easily make passive income.
Even if the stock market is underperforming, dividend-paying stocks will continue to pay you cash dividends yearly. The key to becoming a good stock investor is performing due diligence and selecting the most promising companies. You must analyze how a company makes money and its historical performance before investing!