The market volatility that began last year is set to continue well into 2023. That also means that some of the best stocks on the market can be bought at serious discounts right now. Here are a couple of great Canadian stocks I’ll be buying this year.
Finally … shopping can make you rich
Shopify (TSX:SHOP) is the tech stock that everyone wishes they bought a decade ago. The e-commerce behemoth has revolutionized the one-stop online storefront business and continues to evolve.
The platform has a presence in more than 170 countries and accounts for over US$440 billion of global economic activity. Let that number sink in for a moment.
Shopify’s rise was accelerated with the shift to mobile commerce in lieu of traditional foot traffic to brick-and-mortar stores. This helped the stock surge 380% in the past five years.
When the pandemic hit, Shopify went into overdrive, as mobile commerce took over as the primary channel for many retailers. This led to the stock spiking to insane levels. But as markets began to reopen and closures ended, Shopify dropped.
That drop accelerated as interest rates and inflation began to soar. As a result, Shopify now trades down over 35% over the trailing 12-month period. That’s an intriguing discount that won’t last for long.
Shopify recently revised its pricing structure by hiking rates for the first time in a decade. The effort is aimed squarely at bringing the company forward to profitability. But will the company recover?
There are two key reasons why Shopify is one of the Canadian stocks I’m buying.
First, Shopify’s business is going to continue to grow. The pandemic-induced spike may be over, but over the long term, Shopify will continue to see growth, albeit at a slower rate.
Second, while that growth will continue, the discount that the stock trades at right now won’t. By way of example, that 35% drop I mentioned over the trailing 12 months is completely erased with a whopping 53% gain if we look at just this year.
In other words, Shopify is a great long-term pick to buy now and hold.
Who needs a defensive stock?
It’s never a wrong time to consider a defensive stock. But a defensive stock with nearly half a century of dividend increases and a reliable business backed by regulatory contracts?
That’s exactly what investors can expect from Fortis (TSX:FTS), which is another one of the better Canadian stocks I’ll be buying this year.
Utilities operate stable businesses. They generate a reliable and recurring revenue stream that is backed by regulatory contracts. Often, those contracts can span decades, resulting in a stable revenue stream that gets passed on to investors by way of its dividend.
Fortis’s quarterly dividend works out to a juicy 4.09%. This means that a $40,000 investment in the company, will earn an income of over $1,600. Adding to that appeal is the incredible 49 consecutive years that Fortis has provided upticks to its dividend. The company also forecasts that the annual event will continue through 2027.
Investors not ready to draw on that income can reinvest it until needed, resulting in even further long-term growth.
In a volatile market, a lower-risk investment like Fortis makes perfect sense. And while Fortis isn’t discounted heavily like Shopify, the stock is down over 5% over the trailing 12-month period.
Great Canadian stocks to buy right now
No investment is without risk, and that includes both Fortis and Shopify. Prospective investors should focus on the long-term potential of these Canadian stocks rather than the short-term volatility we’re seeing right now.
In my opinion, Shopify and Fortis are great long-term investments that should be part of a larger, well-diversified portfolio.
