Got $100? 2 Top Canadian Stocks to Buy and Hold

Buy and hold these two Canadian stocks for $100 to generate significant returns in the long term.

| More on:

Stocks can generate higher returns than many other types of investments over the long term. The great thing is that you don’t need a large sum of money upfront to invest in high-quality TSX stocks. Even starting with as little as $100 in fundamentally strong stocks regularly can lead to significant returns over time.

With that backdrop, here are two top Canadian stocks investors can buy and hold for just $100. These companies have well-established businesses and solid growth potential, making them top choices for investors looking to grow their money.

Hydro One

Investors could consider Hydro One (TSX:H) as it offers growth, stability, and income. Unlike other utility companies, Hydro One does not generate power and is not exposed to commodity price volatility. This means it is a pure-play electric power transmission and distribution company that produces stable, low-risk earnings and predictable cash flow.

Hydro One has solid financials, which allow the company to fund its growth initiatives without raising capital from other external sources. Owing to its stellar financials and rate-regulated business, this utility company consistently delivers stable cash flows, offers higher dividend payments, and attractive capital gains.

Hydro One has consistently grown its dividend, supported by higher earnings, regulated cash flows, and rate base growth. The company raised its dividend at a compound annual growth rate (CAGR) of about 5% from 2016 to 2022. Moreover, it increased its dividend by 6% in 2023 and plans to grow it at a similar pace through 2027.

Hydro One projects its rate base to grow by 6% annually through 2027. The company’s $11.8 billion capital plan will support this growth. Thanks to this growth, its earnings per share are forecasted to increase by 5-7% annually.

Hydro One stock has appreciated about 32.6% in one year and grown about 124% in five years. Despite the growth, the stock still has room for upside, driven by its low-risk business model and steady earnings. Further, its solid balance sheet, predictable cash flows, cost reduction initiatives, and ability to deliver both dividends and capital gains make it a top Canadian stock to buy and hold for the long term.

Aritzia

Clothing retailer Aritzia (TSX:ATZ) is another top Canadian stock for long-term investors. The company is known for delivering above-average growth, reflected through its double-digit revenue and adjusted net income growth. Further, it has consistently outperformed the TSX.

For instance, the company’s revenue and net income have grown at a CAGR of 19% and 13% in the last five years, which has driven its shares higher. Aritzia stock has increased over 197% in five years, reflecting a CAGR of 24.3%. Meanwhile, the stock gained over 130% in one year, and this trend will likely continue, owing to the continued growth in its top line and focus on margin expansion.

Aritzia sees its net revenue growing by 15-17% annually through fiscal 2027. Aritzia plans to open eight to 10 new boutiques in the U.S. annually through fiscal 2027 and increase its total retail square footage by up to 60%, likely boosting its revenues. Additionally, Aritzia’s focus on growing its omnichannel offerings and increasing brand awareness will further accelerate its revenue growth rate.

Overall, higher sales and operating efficiency will likely bolster its earnings and support its share price.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Aritzia. The Motley Fool has a disclosure policy.

More on Investing

how to save money
Investing

The Best TSX Stock for Canadians to Buy With $1,000 Right Now

iShares S&P/TSX 60 Index ETF (TSX:XIU) could be a great starter investment for new investors in Canada.

Read more »

Canadian dollars are printed
Dividend Stocks

Beat the TSX With This Cash-Gushing Dividend Stock

Toronto-Dominion Bank (TSX:TD) stock could do well in the year ahead.

Read more »

monthly desk calendar
Dividend Stocks

Monthly Income: Top Dividend Stocks to Buy in November

Here are two of the best monthly dividend stocks in Canada you can buy in November 2024 and hold for…

Read more »

hand stacks coins
Investing

A Top TSX Stock to Buy Now for Real Wealth Later

Intact Financial (TSX:IFC) stock is a fantastic dividend-growth play for the next 15 years and beyond.

Read more »

tsx today
Stock Market

TSX Today: What to Watch for in Stocks on Thursday, November 14

The U.S. wholesale inflation data and Fed chair Jerome Powell’s remarks about the economy will remain on TSX investors’ radar…

Read more »

Man data analyze
Tech Stocks

3 Reasons Celestica Stock Is a Screaming Buy Now

These three reasons make Celestica stock a screaming buy for long-term investors.

Read more »

profit rises over time
Dividend Stocks

These 2 Dow Stocks Are Set to Soar in 2025 and Beyond

Two Dow Jones stocks are screaming buys but Canadians must hold them in an RRSP or RRIF to avoid paying…

Read more »

TFSA (Tax free savings account) acronym on wooden cubes on the background of stacks of coins
Dividend Stocks

How to Use Your TFSA to Earn Ultimate Passive Income

If you have a TFSA, then you have the key to creating ultimate passive income. All you need is a…

Read more »