The 2 Best Canadian Stocks for Beginners Right Now

Stock market beginners in Canada could kickstart their investing journey by buying these two stocks right now.

| More on:

Investing in the stock market for the long term is one of the best ways to multiply your hard and savings. This is one of the key reasons why the world’s great stock investors always advise that stock market beginners should buy quality stocks and hold them for several years. While it’s not easy to time the market, the recent market crash presents a rare opportunity for new investors to enter the market when many fundamentally strong stocks look undervalued.

In this article, I’ll highlight two of the best Canadian stocks beginners can buy today and hold for the long term to get outstanding returns on their investments.

Aritzia stock

Aritzia (TSX:ATZ) is a Vancouver-based apparel designer and retailer with a market cap of about $4.8 billion. While the company primarily focuses on designing and retailing a range of women’s fashion apparel and accessories, it accelerated expansion into men’s clothing in June 2021 after acquiring Reigning Champ — a Vancouver-based designer and manufacturer of premium athletic wear.

In recent years, the company has also increased its focus on business expansion in the United States. As a result of these efforts, the U.S. market accounted for nearly 45% of its total revenue in its fiscal year 2022 (ended in February), while the remaining came from its home market.

In the May quarter, Aritzia’s revenue jumped by 65.2% YoY (year over year) to $407.9 million, as its sales across geographical segments and channels continued to soar. More importantly, its sales in the U.S. surged by a solid 81% YoY during the quarter to account for more than half of its total revenue. Given these positive factors, analysts expect the company to post solid double-digit revenue growth in the next couple of years. Despite these positive factors, ATZ stock currently trades with 17% year-to-date losses, making it look cheap to buy for the long term.

Nuvei stock

Nuvei (TSX:NVEI)(NASDAQ:NVEI) stock has been on my radar for quite some time. It’s a Montréal-based payment technology solutions firm with a market cap of about $6 billion. Despite its solid financial growth in recent years, its stock has lost nearly 47% of its value in 2022 so far and currently hovers around $42 per share.

As COVID-related restrictions accelerated the shift to digital commerce, the demand for Nuvei’s payment tech services saw massive growth. With the help of this strengthening demand, its total revenue rose by 93.2% YoY to US$724.5 million in 2021. Nearly 54% of this revenue figure came from Europe, Middle East, and Africa (EMEA) segment, and another major portion of about 42% came from the North America region.

Earlier this week, Nuvei reported its second-quarter (Q2) 2022 results. During the quarter, its adjusted earnings rose by 15.9% YoY to US$0.51 per share, exceeding analysts’ expectations of around US$0.47 per share. However, the company also slightly lowered its full-year outlook due mainly to recent unfavourable foreign exchange rates, cryptocurrency market volatility, and uncertainties about the global economy. Its outlook adjustment was the key reason why its stock dived more than 20% on the day of its earnings event.

While I agree that these macro factors might affect Nuvei’s short-term growth, its long-term growth outlook remains strong, as the demand for its payment tech services continues to strengthen amid growing digital commerce trends. Given that, a recent dip in this growth stock could be an opportunity for stock market beginners to buy it at a big bargain for the long term.

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.

The Motley Fool has positions in and recommends Nuvei Corporation. The Motley Fool recommends ARITZIA INC. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

More on Stocks for Beginners

The virtual button with the letters AI in a circle hovering above a keyboard, about to be clicked by a cursor.
Tech Stocks

Emerging Canadian AI Companies With Big Potential

These tech stocks are paving the way to an AI-filled future, but still offer enough growth ahead for a strong…

Read more »

Young Boy with Jet Pack Dreams of Flying
Tech Stocks

Is Constellation Software Stock a Buy, Sell, or Hold for 2025?

CSU stock has long been a strong option for high growth, high value stocks. But are there now too many…

Read more »

hand stacks coins
Dividend Stocks

3 Ultra-High-Yield Dividend Stocks You Can Buy and Hold for a Decade

These three high-yield dividend stocks still have some work to do, but each are in steady areas that are only…

Read more »

Asset Management
Stocks for Beginners

TFSA: 4 Canadian Stocks to Buy and Hold Forever

Thinking about what to buy with the new TFSA contribution space in 2025? These four Canadian stocks are worth holding…

Read more »

concept of real estate evaluation
Stocks for Beginners

2 No-Brainer Real Estate Stocks to Buy Right Now for Less Than $1,000

These two real estate sector-focused stocks have the potential to deliver strong returns on your investments in the coming years.

Read more »

engineer at wind farm
Energy Stocks

Invest $20,000 in This Dividend Stock for $100 in Monthly Passive Income

This dividend stock has it all – a strong outlook, monthly income, and even more to consider buying today.

Read more »

stocks climbing green bull market
Stocks for Beginners

3 TSX Stocks Soaring Higher With No Signs of Slowing

Don't ignore stocks just because they look like they're at a high price. Instead, see exactly why they've driven so…

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 »