Diversifying your portfolio with a selection of superb stocks from a broad section of the market is always a great idea. And now that we’re into a new month, it’s the perfect time to look at where to invest.
Given the market volatility we’ve seen this year, there’s no doubt that some investors are weary of buying in September. Still, there are plenty of great stocks to pick that trade at juicy discounts. That’s if you know where to invest right now.
And perhaps best of all, prospective investors don’t need thousands to kickstart those buys. In fact, here are two stocks you can pick up for as little as $500 in September 2023.
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Banking on that recovery
Market volatility — and not just at home, but internationally, has put pressure on markets this year. And that uncertainty has trickled down to nearly every segment of the market, including Canada’s big banks.
Canadian Imperial Bank of Commerce (TSX:CM) has felt the brunt of that drop. The lender has seen its stock price drop over 13% in the trailing 12-month period to where it now flirts with its 52-week low.
Adding to that, CIBC’s third-quarter results announced this week saw adjusted income drop 15% over the prior year to $1.47 billion. Much of that dip was attributed to higher provisions for credit losses.
So then, why should CIBC be one of the stocks that investors look to when deciding where to invest?
CIBC’s recent dip in stock price should be seen as an opportunity to buy shares of a great long-term bank at a huge discount. In fact, prospective investors could grab just over nine shares of the stock for $500.
Throw in CIBC’s juicy 6.29% yield, and you have a very attractive long-term option that will provide growth and income over the long term.
Renewable energy can provide growth and income, too
Investors who are looking for where to invest $500 or more have another option to consider: renewable energy. Over the past several years, renewable energy has increased in importance, and, as a result, many traditional utilities are scrambling to transition over to renewables.
In the case of TransAlta Renewables (TSX:RNW), there is no transition necessary. TransAlta operates a portfolio of over 40 facilities located across Canada, the U.S., and Australia. Those facilities are renewable in nature and include solar, hydro, wind, and natural gas elements.
This makes TransAlta a unique, if not diversified, option for investors to consider. But what really sets TransAlta apart are the following two key points.
First, TransAlta adheres to the same lucrative business model that traditional utilities follow. In short, those facilities are bound by long-term regulated contracts, which provide a recurring and stable revenue stream for the company. Often those contracts can span a decade or longer in duration.
Second, that recurring revenue stream allows TransAlta to provide investors with a juicy dividend. As of the time of writing, that dividend, which is paid out on a monthly cadence, works out to an insane 7.15% yield.
This means that investors who drop $500 into TransAlta can expect to get over 38 shares as an initial investment. While that’s not enough to retire on, it is enough to provide some growth through a few additional shares each year through reinvestments.
Speaking of growth, TransAlta is another example of a stock that trades at a discount right now. As of the time of writing, the stock is down 25% over the trailing 12-month period. This fact alone makes it an excellent option for investors looking for where to invest $500 right now.
Where to invest? There are plenty of options to consider
Finding that perfect mix of stocks for your portfolio takes time. And while no investment is truly without risk, there are some stocks, like CIBC and TransAlta, that also offer defensive appeal and a juicy income.
In my opinion, one or both stocks are great additions to any well-diversified portfolio.
