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Investing is a crucial step towards building wealth and reaching financial objectives. Getting started early allows one to harness the power of compounding, with equity markets offering a convenient entry point for beginners. However, selecting the right TSX dividend stocks is vital, particularly for novice investors who should prioritize companies with robust underlying businesses and stable cash flows regardless of market conditions.
Here are three top picks suitable for beginners:
Waste Connections (TSX: WCN):
- Waste Connections specializes in collecting, transferring, and disposing of non-hazardous solid waste in the United States and Canada. Operating in secondary and exclusive markets, it faces limited competition. The company has seen substantial growth through both organic expansion and aggressive acquisitions, delivering impressive returns over the past decade. Recent acquisitions, such as the purchase of 30 waste treatment and disposal facilities, indicate continued growth potential. With an optimistic 2024 outlook, Waste Connections presents a solid investment opportunity for beginners due to its essential business nature, consistent performance, and healthy growth prospects.
Dollarama (TSX: DOL):
- Dollarama is a discount retailer offering a wide range of consumer products at attractive prices. Leveraging its superior sourcing and logistics capabilities, it consistently delivers value to customers, resulting in strong same-store sales regardless of the macro environment. With consistent top-line and net income growth, Dollarama has delivered impressive returns to investors over the past decade. Plans for expanding its store network and the contribution from its subsidiary, Dollarcity, further enhance its growth prospects. Despite its relatively high valuation, Dollarama remains an attractive buy for beginners due to its solid underlying business and growth potential.
Fortis (TSX: FTS):
- Fortis serves 3.5 million customers, providing electricity and natural gas transmission and distribution services. With the majority of its assets involved in delivering essential services, its financials are stable and predictable. The company has a strong track record of delivering shareholder returns and has consistently increased dividends for the past 50 years. Planned investments in low-risk assets are expected to drive future growth, with management aiming for annual dividend growth of 4 to 6% through 2028. With an attractive valuation and a forward yield of 4.37%, Fortis presents an appealing investment opportunity for beginners seeking steady income and long-term growth.
In summary, Waste Connections, Dollarama, and Fortis offer beginner investors the opportunity to invest in companies with solid fundamentals, growth potential, and stability, making them suitable choices for building a diversified portfolio.
