Investing in international stocks can help you diversify your portfolio and lower overall risk. While there are several quality stocks trading on the TSX, Canadian investors should consider increasing exposure to the United States, which is the world’s largest economy and home to some of the biggest companies globally.
So, here are three U.S. stocks every Canadian investor should own in April 2023.
Apple stock
Valued at a market cap of US$2.6 trillion, Apple (NASDAQ:AAPL) has already returned 8,000% to shareholders in the last 20 years. However, the tech giant remains a promising bet due to its widening ecosystem that now consists of devices such as the iPhone, MacBook, iPad, AirPods, and Apple Watch. Additionally, it also generates sales via the App Store, Apple Music, Apple TV+, and Apple Care.
Its strong brand presence has increased Apple’s installed base across devices to more than two billion. The tech giant has successfully monetized this user base on the back of its subscription products, App Store fees, and other services.
In the December quarter, Apple’s sales were down year over year by 5%. It was the largest quarterly sales decline in six years, as the company is wrestling with high commodity prices and rising interest rates.
Apple’s adjusted earnings are also forecast to narrow from US$6.11 per share in fiscal 2022 to US$5.96 per share in fiscal 2023, while sales are expected to fall by 1.4% to US$388.7 billion. But Apple’s well-capitalized balance sheet, wide economic moat, and enticing brand value make it a top bet right now.
Amazon stock
The largest e-commerce company in the world, Amazon (NASDAQ:AMZN) is valued at a market cap of US$1 trillion. Amazon is also the largest public cloud company and operates the third-largest digital ad platform globally.
Amazon’s sales have increased from a paltry US$15 million in 1997 to more than US$500 billion in 2022. In the last 25 years, AMZN stock has returned 120,000% to shareholders due to this rapid expansion in the top line.
Launched in 2003, Amazon Web Services reported sales of US$86 billion in 2022, while digital ad sales were up 31% year over year. While several online ad companies, including Alphabet and Meta Platforms, are grappling with a slowdown in enterprise ad-spending, the high purchase intent of Amazon users allowed it to increase ad revenue significantly in 2022.
Down 45% from all-time highs, Amazon stock is priced at a discount of 30% to consensus price target estimates.
Microsoft stock
The final stock on my list is Microsoft (NASDAQ:MSFT), another big tech company valued at a market cap of US$2.1 trillion. Microsoft increased sales by 2% year over year, but its operating margin narrowed by 200 basis points in the December quarter. However, it still ended the quarter with an operating margin of 40%, which is exceptional.
In fact, Microsoft generated an operating cash flow of US$11 billion and a free cash flow of US$5 billion in the last quarter.
In the last 20 years, MSFT stock has returned 1,690% to shareholders. Its leadership position in several high-growth verticals, such as gaming, artificial intelligence, enterprise software, and cloud computing, make Microsoft stock a top-notch buy in 2023.
