Avoid Bitcoin: 2 TSX Stocks to Buy for Safer Growth

Bitcoin’s volatility is usually too much for the risk tolerance of a conservative investor, and for them, it’s better to stick with safer growth stocks.

| More on:

Every investment asset comes with its own set of risks. In the good, old days, when commodities were considered the ultimate investments, the risks were associated with shipping, storage, and the spoiling of perishables. The risk with the land was rare and was linked with macro factors, like a mill closing and making the nearby land unattractive for buyers.

Nowadays, the risks are different. With stocks, the risk is usually associated with the underlying business going under, losing investors’ trust, or getting in financial trouble. But the risk profile of stocks is nothing compared to Bitcoin.

Why should you avoid Bitcoin?

It’s important to note that Bitcoin isn’t a bad investment per se. It’s just too wild and unpredictable for most retail investors. Two ideal Bitcoin investor candidates (among retail investors) include people with a thorough knowledge of the crypto market and investors with disposable cash.

But retail investors who want to tuck away their money in reliable investments so they can meet their short-term financial goals and have a decent sum for retirement might consider relatively safer TSX stocks and leverage the power of relatively more predictable growth than Bitcoin can offer.

A solid metal stock

Even though we are centuries ahead of the Iron Age, metal remains an important part of humanity’s foundation. The demand for iron ore is likely to grow over time for a long time, and you might be able to benefit from that growth if you invest in stocks like Champion Iron (TSX:CIA). The company is headquartered in Australia. Its Canadian connection is the wholly owned subsidiary Quebec Iron Ore.

It’s not a very old company, but in the last five years, the company has grown its revenue at an incredible pace. The stock has followed suit, and the five-year CAGR is an unsustainably high number of 102%. If the company can mimic this rate for just five more years, your $10,000 capital can grow to a six-digit nest egg.

The company is also attractively valued (earnings-wise), as its price-to-earnings ratio is at 8.9, even though the stock grew over 130% in the last 12 months. However, it is relatively expensive compared to its book value. The company’s long-term growth prospects seem relatively strong, but you can maximize the growth potential by waiting for the dip that might just be around the corner.

A reliable growth stock

Few growth stocks are as consistently reliable as goeasy (TSX:GSY). The stock has been growing quite steadily for the last five years, and although its growth pace got a significant boost after the crash and recovery, goeasy isn’t a “seasonal” growth stock. Its 10-year CAGR, which is now a bit inflated thanks to its recent growth phase, is 37.6% and might be sustainable for the long term.

goeasy is also a Dividend Aristocrat, and its dividend growth rivals its capital appreciation potential. Its 2021 payout is 3.6 times higher than its 2017 payout, and the financials of the company are so strong that its payout ratio hasn’t breached 30% in the last six years. goeasy offers consistent yet aggressive growth and might push your portfolio to new heights.

Foolish takeaway

A major difference between Bitcoin and the two stocks is the relative reliability of growth. Both companies have a strong position in their industry and niche and have a solid business model, which augments their long-term growth prospects. Bitcoin, however, can’t offer the surety of consistent growth.

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 Adam Othman has no position in any of the stocks mentioned.

More on Dividend Stocks

Train cars pass over trestle bridge in the mountains
Dividend Stocks

Is CNR Stock a Buy, Sell, or Hold for 2025?

Can CNR stock continue its long-term outperformance into 2025 and beyond? Let's explore whether now is a good time to…

Read more »

coins jump into piggy bank
Dividend Stocks

The Smartest Dividend Stocks to Buy With $500 Right Now

These top dividend stocks both offer attractive yields and trade off their highs, making them two of the best to…

Read more »

Middle aged man drinks coffee
Dividend Stocks

Here’s the Average TFSA Balance at Age 35 in Canada

At age 35, it might not seem like you need to be thinking about your future cash flow. But ideally,…

Read more »

ETF stands for Exchange Traded Fund
Dividend Stocks

How to Invest Your $7,000 TFSA Contribution in 2024

Here's how I would prioritize a $7,000 TFSA contribution for growth and income.

Read more »

a man relaxes with his feet on a pile of books
Dividend Stocks

CPP Pensioners: Watch for These Important Updates

The CPP is an excellent tool for retirees, but be sure to stay on top of important updates like these.

Read more »

Technology
Dividend Stocks

TFSA Investors: 3 Dividend Stocks I’d Buy and Hold Forever

These TSX dividend stocks are likely to help TFSA investors earn steady and growing passive income for decades.

Read more »

four people hold happy emoji masks
Dividend Stocks

Love Dividend Growth? Check Out These 2 Income-Boosting Stocks

National Bank of Canada (TSX:NA) and another Canadian dividend-growth stock are looking like a bargain going into December 2024.

Read more »

An investor uses a tablet
Dividend Stocks

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

Enbridge stock may seem like the best of the best in terms of dividends, but honestly this one is far…

Read more »