SIS:CC - 5 Stocks You Can Confidently Invest $500 in Right Now
2023-11-22 21:30:00 ET
You don’t need a lot to start investing in today’s world. With commission-free trading available on the Wealthsimple and National Bank of Canada platforms, new investors can easily spread their risk across different stocks. Let’s say you have $500 to spare right now. You can confidently invest across these top TSX stocks for the long term.
Bank of Nova Scotia
The large bank stock, Bank of Nova Scotia ( TSX:BNS ), is battered because it is perceived to be a riskier bank among the Big Six Canadian bank stocks due to its emerging market exposure. These markets have a higher percentage of loan losses. Given today’s generally higher interest rate and relatively high inflation environment, many investors are staying away from BNS stock.
The jewel of the value stock is a rich dividend that remains safe. Its dividend yield is over 7% at $60.41 per share at writing. At this price, the dividend stock trades at a price-to-earnings ratio (P/E) of approximately 8.6, which is a meaningful discount of roughly 23% from its long-term normal P/E.
Manulife
Another stock in the financial services industry that appears to be cheap is Manulife ( TSX:MFC ). It’s obvious the market has low expectations of the life and health insurance company, which only trades at a P/E of about 7.8.
Perhaps it requires a longer dividend growth streak to prove to investors it’s worthy. So far, it has increased its dividend for nine consecutive years with a respectable five-year dividend growth rate of 10%. Notably, its latest dividend hike was 10.6% in February.
At $26.13 per share at writing, the dividend stock offers a decent dividend yield of close to 5.6%. Its payout ratio is estimated to be sustainable at about 57% of earnings this year and 43% based on adjusted earnings.
Brookfield Infrastructure Partners L.P.
Since it was spun off from its parent company, Brookfield Infrastructure Partners L.P. ( TSX:BIP.UN ) has increased its cash distribution every year. Its 10-year cash distribution growth rate is 9.1%. Despite a higher interest rate environment, year to date, the global infrastructure platform still managed to grow its funds from operations per unit by 8.5% year over year.
Management is very excited about the opportunities available in its data centre segment. It has made meaningful acquisitions in the growing sector as it anticipates industry tailwinds from artificial intelligence and cloud deployments. Brookfield Infrastructure’s cash distribution yield of about 5.8% is attractive, as is the undervalued stock .
Dream Industrial REIT
In a higher interest rate environment, Dream Industrial REIT ( TSX:DIR.UN ) is also beaten down. In a generally favourable industry, the industrial real estate investment trust (REIT) maintains a high occupancy of north of 97%, allowing it to generate stable cash flows to support its cash distribution. Its portfolio is diversified across 322 industrial assets.
Dream Industrial REIT is a good consideration for investors looking for monthly income, as the Canadian REIT pays out juicy monthly cash distributions. The discounted stock offers a good cash distribution yield of 5.7%. At $12.27 per unit, analysts believe the stock is undervalued by about 23%.
Savaria
Savaria ( TSX:SIS ) is a name to consider to bank on a growing aging population. The global leader in the accessibility industry designs, manufactures, distributes, and installs accessibility equipment, such as stairlifts for straight and curved stairs, vertical and inclined wheelchair lifts, and elevators for home and commercial use.
Additionally, Savaria manufactures and markets a selection of pressure management products for the medical market, medical beds for the long-term care market, and medical equipment and solutions for the safe handling of patients, including ceiling lifts and slings. Furthermore, it converts and adapts vehicles for personal and commercial uses.
Year to date, Savaria has experienced sales growth of 7.5%, adjusted earnings-per-share growth of 7.1%, and adjusted EBITDA (a cash flow proxy) growth of 8%. It also offers a dividend yield of 3.6%. At $14.16 per share, the 12-month analyst consensus price target represents a discount of roughly 26%. The small-cap stock has the potential to deliver above-average growth over the next 5 to 10 years.
The post 5 Stocks You Can Confidently Invest $500 in Right Now appeared first on The Motley Fool Canada .
Fool contributor Kay Ng has positions in Bank of Nova Scotia, Brookfield Infrastructure Partners, Manulife, and Savaria. The Motley Fool recommends Bank of Nova Scotia, Brookfield Infrastructure Partners, and Dream Industrial Real Estate Investment Trust. The Motley Fool has a disclosure policy .
2023