2 Dead-Simple Canadian Stocks You Can Buy Right Now With $1,000

I’ve always thought that long-term investing starts with making small purchases over time. Indeed, dollar-cost averaging for a given stock (or index funds) is a proven way to grow one’s wealth over a very long period of time. It’s a strategy I use in my own personal portfolio, and one I would recommend all long-term investors consider as their own.

The point is, identifying individual stocks with the kind of staying power (and earnings growth potential) that can boost both dividends and capital growth over a long period of time is easier said than done. Companies fail for all kinds of reasons, and this is an inherently risky space. Investors can make incredible returns, in part because they are the ones taking on this risk.

That said, there are some names in the world of Canadian stocks that I think remain unrivaled for long-term investors looking for upside. Here are two of my top picks right now.

Toronto Dominion Bank

I keep coming back to Canadian bank stocks as one of the best ways for global investors to gain exposure to this sector. I’m going to be on standby Toronto Dominion Bank (TSX:TD) as a top way to play the banking sector in Canada.

TD has seen very robust revenue and earnings growth in recent quarters, driven by strength within the company’s core loan portfolio. That may come as a surprise to some investors, given the pressure that other lenders (particularly regional lenders in the US) have been experiencing recently. And with such a robust retail banking business in the US market, you could immediately point to a bank like TD as having a higher risk than the market is currently pricing in.

The point is that TD’s valuation ratio remains lower than most of its US peers. And as a leading Canadian bank, TD benefits from strong regulation that limits negative impacts during bear market cycles.

So regardless of where you see the economy going from here, I’d say TD has one of the best growth profiles among its peers. That’s valuable, and that’s why I’d say TD stock is up as it has been over the past year.

Fortis

One of the most stable companies in the Canadian market, Fortis (TSX:FTS) has proven to be an absolute gem for investors who bought this stock at any point over the last five decades.

That’s actually a tough statement to make for any stock in the market. But Fortis’ core business model of providing electricity and natural gas services to millions of residential and commercial customers is as proven as it gets. We will need to power our homes and businesses for decades (and centuries) to come. So if there’s one industry or sector that’s about as resistant to change as they come, it’s the utilities sector.

What’s also interesting about this recent move is that it continues to reduce Fortis’s dividend yield, an important part of Fortis’s total returns over the long term. While some investors may be waiting for a decline in share prices (and higher yields), I believe that Fortis’ long-term dividend growth profile should bring this stock back to the level of returns most investors are used to.

With a yield of 3.6% and solid capital growth leading to a total return of around 10% for investors over long periods of time, this is how I would hold out in a market that could become very volatile in the coming years.