My 5 Favourite Stocks to Buy Right Now

Here’s why Canadian investors can consider buying quality stocks such as Shopify and Propel to beat the broader markets.

Equities as an asset class have showcased an ability to generate inflation-beating returns for long-term investors. Canadians should create a diversified portfolio of fundamentally strong companies to deliver outsized gains over time while lowering investment risk. Keeping this in mind, here are my five favourite stocks to buy right now.

Shopify stock

Down almost 50% from all-time highs, Shopify (TSX:SHOP) stock has already returned over 3,300% to shareholders since its initial public offering in mid-2015. Shopify provides a robust platform that helps merchants and businesses to create and enhance their online presence.

Like most other e-commerce companies, Shopify experienced strong demand amid COVID-19, increasing sales from US$1.58 billion in 2019 to US$4.6 billion in 2021. While its sales growth has decelerated in the last three years, the e-commerce giant has increased revenue by 23.2% to US$7.76 billion in the last 12 months.

Moreover, its focus on operational efficiencies has meant Shopify’s operating margin has improved to 13.8% in the second quarter (Q2) of 2024, up from 3.7% in 2023. Further, its free cash flow in the last 12 months has totalled more than US$1.28 billion, compared to US$905 million in 2023.

EQB stock

Among the fastest-growing digital banks in Canada, EQB (TSX:EQB) is valued at $4 billion by market cap. With an average return on equity of over 15%, EQB has grown its book value by 13-15% annually in recent years.

A widening earnings base has allowed EQB to increase its dividends by double-digit percentages yearly in the past decade. It currently pays shareholders an annual dividend of $1.88 per share, indicating a forward yield of 1.8%. Priced at 8.6 times forward earnings, EQB stock is quite cheap and remains a compelling investment at the current multiple.

Propel Holdings stock

Another undervalued TSX stock part of the cyclical lending sector is Propel Holdings (TSX:PRL). Propel offers a fintech lending platform to facilitate credit products such as installment loans and lines of credit.

In Q2 of 2024, Propel increased the following:

  • Revenue by 49% to $106.8 million
  • Adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) by 67% to $30.4 million
  • Adjusted net income by 82% to $15.6 million

It ended Q2 with a return on equity of 38%, up from 26% in the year-ago period. Despite these impressive growth numbers, Propel stock trades at a cheap forward price to earnings multiple of 12.6 times.

Broadcom stock

A semiconductor giant, Broadcom (NASDAQ:AVGO) is among the largest companies in the world and part of the artificial intelligence megatrend. Broadcom recently hiked its guidance for artificial intelligence sales as it is part of the segment that addresses demand from hyperscalers. Basically, these hyperscalers are investing heavily in large language models to create robust AI platforms.

In fiscal 2024 (ending in October), Broadcom expects AI sales at US$12 billion, above its previous estimate of US$11 billion. Broadcom designs and develops semiconductor chips and infrastructure products that have experienced strong demand from big tech companies.

Priced at 28 times forward earnings, AVGO stock is not too expensive given annual earnings growth is forecast at 20% through fiscal 2028.

Brookfield Asset Management stock

The final stock on the list is Brookfield Asset Management (TSX:BAM), one of the largest asset managers globally. Brookfield Asset Management raised US$68 billion of capital in Q2 of 2024, bringing its total assets under management to almost US$1 trillion.

Brookfield Asset Management continues to grow via partnerships and has collaborated with Oaktree, a premium credit manager. In 2024, it also formed the Brookfield Credit Group to incorporate private credit and direct lending funds, managing roughly US$300 billion of credit assets.

Private Equity is another major business segment for Brookfield Asset Management. Since the inception of its private equity fund offerings, the segment has generated a net internal rate of return of 21%, which is exceptional.

With a forward dividend yield of 3.2%, BAM stock trades at a price-to-earnings multiple of 28.3 times, which is not too expensive.

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 Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Propel and Shopify. The Motley Fool recommends Brookfield Asset Management and EQB. The Motley Fool has a disclosure policy.

More on Investing

think thought consider
Investing

Should You Buy Couche-Tard Stock Aggressively Before Nov. 25?

Here’s what could help Couche-Tard stock rebound after its upcoming earnings event.

Read more »

calculate and analyze stock
Bank Stocks

4% Dividend Yield? I Keep Buying This Dividend Stock in Bulk!

If you find the perfect dividend stock, you never have to worry about investing again. And that's what you get…

Read more »

Paper Canadian currency of various denominations
Dividend Stocks

Should You Buy the 3 Highest-Paying Dividend Stocks in Canada?

A few dividend stocks saw a sharp correction in November, increasing their yields. Are they a buy for high dividends?

Read more »

oil and natural gas
Investing

Is Imperial Oil Stock a Buy for its 2.3% Dividend Yield?

Imperial Oil (TSX:IMO) stock: A century of dividends, 30 years of growth, and a 2.3% yield that could evolve into…

Read more »

Paper Canadian currency of various denominations
Stock Market

3 No-Brainer Stocks to Buy Right Now for Less Than $120

Here are three undervalued TSX stocks that are positioned to deliver outsized gains to shareholders over the next 12 months.

Read more »

Man holds Canadian dollars in differing amounts
Investing

Have $500? 3 Absurdly Cheap Stocks Long-term Investors Should Buy Right Now

These three cheap stocks offer excellent buying opportunities for long-term investors.

Read more »

money while you sleep
Dividend Stocks

Buy These 2 High-Yield Dividend Stocks Today and Sleep Soundly for a Decade

These stocks pay attractive dividends that should continue to grow.

Read more »

Pile of Canadian dollar bills in various denominations
Dividend Stocks

$15,000 Windfall? This Dividend Stock Is the Perfect Buy for Monthly Passive Income

If you get a windfall, after debt investing should be your next top option to create even more passive income!

Read more »