The TSX Composite benchmark’s impressive rally in recent months is drawing considerable attention from new investors, especially toward high-growth tech stocks. Clearly, everyone wants to take advantage of the market’s strong performance, and that’s perfectly fine. However, it’s important for stock market beginners to remember that the macroeconomic challenges, which significantly affected investors’ sentiment in the first half of 2023, haven’t completely subsided. This implies that the market could still face high volatility in the near term.
Keeping this in mind, you may want to approach 2024 with a balanced strategy by investing a large portion of your portfolio in safe stocks, rather than overcommitting to growth stocks. In this article, I’ll highlight two of the safest TSX stocks you can buy with an investment as modest as $5,000 in 2024 and hold for the long term.
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A safe TSX stock from the retail sector
Given the ongoing macroeconomic uncertainties, Dollarama (TSX:DOL) could be one of the safest stocks listed on the Toronto Stock Exchange in 2024. It has a robust business model, with its affordable and value-oriented products continuing to see high demand, even in challenging economic conditions. The Mont Royal-headquartered value retailer currently has a market cap of $26.5 billion, as its stock trades at $94.29 per share after rising by 17.4% in the last year.
In the first three quarters (ended in October 2023) of its fiscal year 2024, Dollarama’s total revenue rose 18.1% YoY (year over year) to $4.2 billion. To add optimism, the company’s adjusted net earnings during the same period improved by even at a higher rate of 30.3% YoY to $2.41 per share.
Despite the ongoing macroeconomic uncertainties, Dollarama’s growth prospects remain promising due mainly to its expanding store network across Canada, effective cost management, and commitment to a long-term business strategy. Besides these positive factors, Dollarama’s decent quarterly dividends make this reliable TSX stock even more attractive for long-term portfolios.
And a safe financial stock to consider in 2024
Manulife Financial (TSX:MFC) could be another trustworthy stock to consider on the TSX today. The shares of this Toronto-based financial services giant have risen 19.2% in the last year to currently trade at $29.14 per share with a market cap of $52.7 billion. At this market price, MFC offers an attractive 5% annualized dividend yield and distributes these dividend payouts every quarter.
In the third quarter of last year, Manulife posted a net income of $1.0 billion, reflecting more than 20% YoY positive growth. Similarly, its core earnings stood firm at $1.7 billion, excluding the impact of foreign exchange translation, up 28% from a year ago. This strong growth was partly driven by its stronger investment earnings due to higher interest rates and improved insurance experience in the United States and Canada. Besides that, Manulife’s core earnings from the Asian market jumped 33% YoY, while its new business sales in the region rose 16%.
Manulife is actively improving its digital services to better serve customized customer needs globally. This strategy could ensure its steady financial growth in the future, making it among the safest TSX stocks to consider in 2024.
