3 Top Stocks for Beginners in 2020

Top stocks like Shopify (TSX:SHOP)(NYSE:SHOP) should be on your radar for 2020 if you’re a beginner.

If this is your first time investing in stocks, congratulations. A historic market crash is the perfect opportunity for first-time investors to get started. Valuations are low, and top stocks have already priced in the worst-case scenario. Your long-term returns should be better than most investors’ returns. 

However, you need to tread lightly. Picking the right stocks could boost your wealth tremendously. Picking the wrong ones will leave a permanent imprint on your finances. With that in mind, here are the top three safe and robust stocks I would recommend to a beginner. 

Top stock one

Fortis (TSX:FTS) has been my favourite top stock for years. The company is so resilient, it’s almost boring. 

Utilities have always been considered recession-proof. Families need to pay their electricity bills even during a downturn. Now that the economy has turned and people are staying at home, this theory is playing out. 

Fortis stands out as a top stock among its peers because of its balance sheet. Before the crisis erupted, the company had $370 million in cash and cash equivalents. Book value per share is $36.5. Meanwhile, the dividend-payout ratio is a mere 48.5%. 

In other words, Fortis can sustain or even boost its dividend this year. After all, the company has managed steady dividend growth for 46 years. It’s a top stock with an attractive 3.44% dividend yield. In a volatile market, Fortis stands out as a safe bet for new stock pickers. 

Top stock two

Similar to Fortis, BCE (TSX:BCE)(NYSE:BCE) offers an indispensable service. Wireless communications are a life-saving utility while Canadians are social distancing. In fact, the rise of telehealth and online education make this top stock even more attractive. 

Bell’s market dominance makes it more attractive than its peers. In the coming months, as families adjust their household budgets, Bell could have greater pricing power than its rivals. That means the company’s 23.5% operating margin is less vulnerable. 

BCE’s revenue and profits have steadily expanded over the years. That’s been reflected in its stock price and dividend. The stock is up 122% since 2008. Meanwhile, the dividend has expanded by 30% over the past five years alone. 

That trajectory of dividend growth makes this a top stock that’s also a Dividend Aristocrat. Add it to your long-term watch list.

Top stock three

Shopify (TSX:SHOP)(NYSE:SHOP) is down just 18% from its all-time high in February. It’s held up much better than the rest of the stock market. 

This top stock is Canada’s flagship technology giant. The company is now so dominant in the e-commerce sector, some investors are even comparing it to Jeff Bezos’s trillion-dollar giant. 

However, of the three top stocks I’ve mentioned here, I think Shopify is the riskiest. Firstly, it isn’t profitable. The company is on a “growth-at-all-costs” trajectory. That’s worked out well over the past five years. Sales have expanded as the economy boomed

Now, the economy has turned. People have less income to spend on online shopping. Meanwhile, the global supply chain has been disrupted by COVID-19. Shopify stock doesn’t reflect these issues yet. The valuation is a bit over the top. 

That being said, I believe Shopify has the perfect recipe for long-term success. Its network of merchants and robust platform are a competitive edge. The global retail market is worth trillions of dollars, and e-commerce has barely scratched the surface. Beginners should add this top stock to their portfolio if the price drops in 2020. 

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 Vishesh Raisinghani has no position in any of the stocks mentioned. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Shopify and Shopify.

More on Stocks for Beginners

open vault at bank
Dividend Stocks

1 Magnificent TSX Dividend Stock, Down 10%, to Buy and Hold for a Lifetime

A recent dip makes this Big Bank stock an attractive buying opportunity.

Read more »

senior relaxes in hammock with e-book
Dividend Stocks

Top Canadian Stocks to Buy for Passive Income

Want to generate a juicy passive income that can last for decades? Here are three stocks every investor needs to…

Read more »

dividends grow over time
Dividend Stocks

These Are the Top 4 Undervalued Stocks to Buy Right Now

These four undervalued stocks offer a change to get in on great value long term, with promising futures ahead.

Read more »

data analyze research
Stocks for Beginners

Top Canadian Stocks to Buy With $5,000 in 2025

Got $5,000 that you want to invest in some long-term stock holdings? These Canadian stocks could be the ideal fit…

Read more »

how to save money
Stocks for Beginners

Canada’s Biggest Winners in 2025? My Money’s on These 2 TSX Stocks

Here’s why I’m betting on these TSX stocks to be among Canada’s biggest winners in 2025.

Read more »

A plant grows from coins.
Stocks for Beginners

1 Canadian Stock Ready to Surge In 2025

First Quantum stock is one Canadian stock investors should seriously consider going into 2025, and hold on for life!

Read more »

Concept of multiple streams of income
Stocks for Beginners

The Smartest Dividend Stocks to Buy With $500 Right Now

The market is flush with great opportunities right now, and that includes some of the smartest dividend stocks every portfolio…

Read more »

customer uses bank ATM
Stocks for Beginners

A Dividend Giant I’d Buy Over TD Stock Right Now

While TD Bank recovers from a turbulent year, this dividend payer with a decent yield and lower payout ratio is…

Read more »