If I were starting investing today, here are a few top TSX stocks I’d buy right away. I believe these stocks offer principal safety for long-term investing because they’re backed by underlying, quality businesses and are trading at good valuations.
Brookfield Infrastructures Partners L.P.
Brookfield Infrastructures Partners L.P. (TSX:BIP.UN) is a solid long-term investment. It pays a decently high cash distribution yield that offers quality and growing passive income for its investors. Its cash flows are diversified and resilient, which comes from cash cow assets, including regulated utilities, toll roads, railroads, midstream assets, data centres, etc.
At $38.56 per unit at writing, analysts estimate that it trades at a meaningful discount of approximately 28%. This represents solid near-term upside potential of about 39%. At this price, it offers a cash distribution yield of 5.7%.
Importantly, BIP.UN has a track record of increasing its cash distribution sustainably. For your reference, it’s 10-year cash distribution growth rate is 8.3%. Going forward, it aims to increase its cash distribution safely by 5 to 9% per year.
Toronto-Dominion Bank
It’s also uncommon to find large North American bank Toronto-Dominion Bank (TSX:TD) on a big sale. The big Canadian bank stock has also raised its dividend sustainably over time, supported by resilient adjusted earnings through the economic cycle. Its relatively high dividend yield of almost 5.4% suggests the stock is on sale.
TD Dividend Yield data by YCharts
At $75.88 per share at writing, the bank stock trades at a discount of almost 20% from its long-term normal price-to-earnings ratio. TD serves as a good core holding for diversified portfolios. And patient investors should be well-rewarded in income and solid returns for a long-term investment.
Granite REIT
Higher interest rates since 2022 have triggered a sell-off in Canadian real estate investment trusts (REITs), including Granite REIT (TSX:GRT.UN). This is an opportunity for investors to get in the industrial REIT, which has solid fundamentals.
Granite’s portfolio enjoys a high occupancy of 95% and a weighted average lease term of about six years. It’s rare for Canadian REITs to have a track record of cash distribution increases – Granite REIT has increased its cash distribution for 13 consecutive years with a 10-year cash distribution growth rate of 4.3%.
At $69.42 per unit at writing, analysts think it trades at a good discount of 20%, which means it has near-term upside potential of 25%. Meanwhile, it yields almost 4.8% for the wait.
For the latest news in the industrial REIT, investors can look forward for Granite REIT’s second-quarter results on August 7.
Enbridge
For outsized dividend income, beginner investors can consider Enbridge (TSX:ENB). The large North American energy infrastructure company has paid dividends for about 70 years and an increasing dividend for about 28 consecutive years.
Its growth has slowed dramatically in recent years. On the other hand, its current dividend yield has been pushed to almost 7.6%. It maintains a sustainable payout ratio based on its distributable cash flow and will likely increase its dividend by about 3% per year over the next couple of years.
At $48.25 per share at writing, analysts believe ENB stock trades at a discount of close to 10%, making it a reasonably valued blue chip stock for income. With this investment, investors can expect to earn most of their total return from the big dividend.
