© Reuters. Are you new to the stock market? Here are 3 stocks you should buy today
So you’ve decided to start investing on your own. Cheer! It is a very big step that you have just taken to become financially independent. What stocks should you hold in your portfolio? As a new investor, I think you should focus on companies that have very easy-to-follow businesses. This will allow you to spend less time understanding what a certain company does on a day-to-day basis and more time researching new stocks to add to your portfolio.
In this article, I will discuss three stocks you should buy today if you are new to the stock market.
Buying One of the Canadian Railroads Buying one of the Canadian railroads would be a great place to start. In Canada, the railway industry is dominated by a large duopoly. Both companies operate rail networks that stretch from coast to coast. If I had to choose, I would suggest an investment in Canadian National Railways (:TSX:)(NYSE:CNI). The two Canadian railway companies call on me. However, Canadian National’s long tradition of increasing the dividend gives it the advantage, in my opinion.
Listed as a Canadian dividend aristocrat, Canadian National has increased its dividend in each of the past 25 years. Over the past five years, Canadian National’s dividend has grown at a CAGR of 12.2%. This means that an investor’s source of passive income, from that stock, would have grown faster than the rate of inflation by a wide margin during that time. A consistent performer, Canadian National stock has gained 59% over the past five years before accounting for dividends.
This financial company would be a great catch The Canadian financial sector contains many excellent stocks for beginners. In this article, I will mention Brookfield Asset Management (TSX:)(TSX:BAM.A)(NYSE:BAM). It operates a portfolio of approximately $690 billion in assets under management. This makes Brookfield one of the largest alternative asset management companies in the world. Focusing on real assets, Brookfield has exposure to the infrastructure, real estate, renewable utilities and private equity sectors.
Another excellent dividend-paying stock, Brookfield has increased its dividend in each of the past nine years. While this hasn’t been the best year for Brookfield stocks, historically these stocks have beaten the market by a very wide margin. Over the past five years, Brookfield shares have gained 113% even before dividends are included.
Learn about utility companies Finally, novice investors should consider buying shares of a utility company. These companies don’t tend to experience massive business downturns during recessions. Thus, investors may be able to use these stocks to provide stability to their portfolios during times of market uncertainty. One company worth mentioning is Algonquin Power & Utilities (TSX:AQN)(NYSE:AQN). It provides renewable electricity and regulated utilities to customers across North America.
Algonquin has increased its dividend in each of the past 10 years, making it another great stock in this regard. This company also offers a forward dividend yield of 4.37%, which could make it even more attractive to investors. Over the past five years, Algonquin shares have gained 52.6%, significantly outpacing the broader market.
The post Are you new to trading? Here are 3 stocks you should buy today appeared first on The Motley Fool Canada.
Foolish contributor Jed Lloren has no position on any of the stocks mentioned. The Motley Fool recommends Brookfield Asset Management Inc. CL.A LV and Canadian National Railway.
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