Should You Invest $1,000 In Costco Wholesale?

When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 29 percentage points.*

They just revealed what they believe are the Top Stocks for 2025 and Beyond for investors to buy right now… and Costco Wholesale made the list -- but there are 14 other stocks you may be overlooking.

Get Our 15 Top Stocks Today * Returns as of 3/20/25

How Diversification Benefits You

Spread your risk by diversifying across quality dividend companies such as TransCanada Corporation (TSX:TRP)(NYSE:TRP). You’ll be surprised by the benefits that diversification brings.

We all know not to put all of our eggs in one basket, but instead we should spread the risk around. For stock investing, this means we shouldn’t put all of our investment dollars in one stock or industry. After all, industries and individual stocks take turns outperforming and underperforming.

Let’s say you have $8,000 to invest. You should diversify it equally across four quality stocks in four diverse industries and place $2,000 in each stock.

Utility

You might pick Brookfield Infrastructure Partners L.P. (TSX:BIP.UN)(NYSE:BIP) as your utility holding because you like its international exposure as well as its above-average yield of 5.5%, which is supported by its roughly 90% contracted cash flows. Brookfield has increased its distribution for eight consecutive years.

Real estate investment trust

You might pick Artis Real Estate Investment Trust (TSX:AX.UN) as your real estate investment trust holding because you like that its portfolio is diversified across retail, office, and industrial properties and that its price has been under pressure due to its exposure to Alberta. It has a juicy yield of 8.4%, which is well supported by its funds from operations. Overlook the fact that Artis doesn’t consistently increase its distribution.

Bank

You might pick Canadian Western Bank (TSX:CWB) as your bank holding because it’s undervalued with a multiple of a little above nine. As the bank expands outside western Canada, it aims to deliver higher growth again.

In the meantime, Canadian Western Bank’s 3.75% yield is rock solid because its payout ratio is only 35%. On top of that, the company has increased its dividend for 24 consecutive years.

Energy infrastructure

You might pick TransCanada Corporation (TSX:TRP)(NYSE:TRP) as your energy infrastructure holding because it provides an essential product and service to the economy by transporting energy.

Its yield of 4.5% is solid, and it has increased its dividend for 15 consecutive years. In the next few years, TransCanada plans to continue increasing it by 8-10% per year.

Conclusion

In the past year, Brookfield Infrastructure declined 8%, Artis declined 15%, Canadian Western Bank declined 12%, and TransCanada declined 8%. If you’d only held one of these companies, your portfolio would have fallen from 8% to 15%, but by holding all four, your portfolio would have fallen almost 11%. In essence, you’re spreading out the risk.

Generally, there are psychological benefits to holding a basket of quality companies, so when one falls, another may rise. Of course, all holdings can fall in the same period. Still, having $2,000 in four companies makes it easier to hold on to those stocks than having $8,000 in only one company. And you can collect a steady income stream from the dividends.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Kay Ng owns shares of Brookfield Infrastructure Partners, CDN WESTERN BANK, and TransCanada.

More on Dividend Stocks

analyze data
Dividend Stocks

How I’d Invest $28,000 in Canadian Natural Resource Stock to Amass Personal Wealth

Investing in TSX dividend stocks such as Enbridge can help you earn a passive-income stream in 2025.

Read more »

hand stacks coins
Dividend Stocks

Got $400? How I’d Start Building Income With 3 High-Yield Stocks for the Long Term

These high-yield dividend stocks have a solid payout history, making them compelling investments to generate passive income.

Read more »

A close up color image of a small green plant sprouting out of a pile of Canadian dollar coins "loonies."
Dividend Stocks

I’d Put $15,000 in These 3 Dividend-Growth Champions for Increasing Income Potential

Want to offset some volatility? Here are three defensive dividend-growth champions that can generate a juicy yield right now.

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

Transform Your TFSA Into a Cash-Creating Machine With $7,000

Discover how the Tax-Free Savings Account can be your golden goose for generating cash without losing your investment.

Read more »

monthly desk calendar
Dividend Stocks

How I’d Invest $10,000 in Canadian Value Stocks for Monthly Dividend Income

A $10,000-diversified portfolio of value stocks focusing on dividend safety, yield, growth, and payment schedules can provide a reliable source…

Read more »

a person watches a downward arrow crash through the floor
Dividend Stocks

Is This Correction Your Chance? Top 4 Canadian Dividend Stocks on Sale

Stocks may be down, but now is your chance to get some of these top dividend stocks on sale.

Read more »

Confused person shrugging
Dividend Stocks

Where to Invest $2,500 in the TSX Today

These TSX stocks offer attractive dividends and a shot at decent upside on a rebound.

Read more »

Pile of Canadian dollar bills in various denominations
Dividend Stocks

Invest $25,000 in These Dividend Stocks for $1,956.66 in Annual Passive Income

Dividends stocks can make a huge difference, even if shares don't move an inch. And these might be the best.

Read more »