Top TSX Stocks to Buy Now for Real Wealth Later

Investors should consider investing in top TSX stocks that offer decent income to help support their financial future.

| More on:
ways to boost income

Source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

When it comes to wealth creation, few avenues compare to the potential of stock investing. With careful selection of top TSX stocks and some patience, investors can unlock significant financial growth over time. Here’s a closer look at two compelling stock options that could lead to real wealth.

Magna International: A dividend dynamo

Magna (TSX:MG) is a cyclical stock currently trading at an attractively low price-to-earnings ratio, making it an intriguing option for savvy investors. After a period of volatility, the stock appears to be consolidating, signalling a potential upswing.

Over the last decade, Magna has shown impressive financial resilience, increasing its revenue per share at a compound annual growth rate (CAGR) of 7.1%. This growth has translated into solid operating income per share growth of 6.7%.

Despite the inherent risks of economic fluctuations, Magna has maintained a commitment to its shareholders by consistently paying and increasing dividends since 2010. With a 10-year dividend growth rate of 11%, it stands out as a strong choice for income-focused investors. The company’s ability to sustain such a dividend is supported by a robust balance sheet and conservative payout ratio, estimated to be around 35% of adjusted earnings and 46% of diluted earnings this year.

The stock has the potential for a 35% upside should it return to its long-term normal valuation. Priced at about $60 per share, Magna also offers a respectable dividend yield of nearly 4.4%, providing a solid foundation for returns. For those looking to make informed investment choices, Magna’s risk-reward profile positions it as a top contender in the blue-chip cyclical stock arena.

Brookfield Renewable Partners: Powering the future

Another promising name in the Canadian market is Brookfield Renewable Partners L.P. (TSX:BEP.UN). This renewable energy stock has rebounded impressively, recovering 39% from its earlier lows this year. Analysts suggest that it remains fairly valued, offering a good opportunity for investors keen on sustainable growth.

Brookfield Renewable is strategically positioned to capitalize on the ongoing global shift towards renewable energy. With a footprint in about 30 major power markets across North and South America, Europe, and the Asia Pacific, it boasts a diverse portfolio that includes hydro, wind, solar, and energy storage solutions. Its operational capacity stands at approximately 32,500 megawatts, complemented by a robust pipeline of about 157,000 megawatts in development projects.

The company benefits from an investment-grade balance sheet, with most of its debt being long term and fixed rate. This structure provides predictability in interest expenses and shields the company from rising rates.

Brookfield Renewable enjoys a liquidity cushion of US$4.4 billion, bolstered by its asset recycling strategy and partner capital, positioning it well for future growth opportunities. The company anticipates deploying at least US$8 billion in capital for acquisitions and development projects over the next five years.

Investors can look forward to consistent cash distribution growth. For example, BEP’s 10-year cash distribution growth rate was a CAGR of 5.7%. The company benefits from long-term contracts that insulate its cash flows from market volatility and inflation. Brookfield Renewable aims to grow its distribution by 5–9% annually, starting investors off with a commendable cash distribution yield of 5% today. This combination of growth potential and attractive returns makes Brookfield Renewable a stellar addition to any diversified investment portfolio focused on sustainable wealth.

The Foolish investor takeaway

In the ever-evolving landscape of stock investing, Magna International and Brookfield Renewable Partners present interesting cases for building real wealth. With their unique strengths and growth trajectories, these TSX stocks not only offer the potential for capital appreciation but also for generating income.

Should you invest $1,000 in Northland Power right now?

Before you buy stock in Northland Power, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Northland Power wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $21,058.57!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 38 percentage points since 2013*.

See the Top Stocks * Returns as of 2/20/25

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 Kay Ng has positions in Brookfield Renewable Partners. The Motley Fool recommends Brookfield Renewable Partners and Magna International. The Motley Fool has a disclosure policy.

If You Thought Apple and Microsoft Were Big, You Need to Read This.

The steel industry produced the world's first $1 billion company in 1901, and it wasn't until 117 years later that technology giant Apple became the first-ever company to reach a $1 trillion valuation.

But what if I told you artificial intelligence (AI) is about to accelerate the pace of value creation? AI has the potential to produce several trillion-dollar companies in the future, and The Motley Fool is watching one very closely right now.

Don't fumble this potential wealth-building opportunity by navigating it alone. The Motley Fool has a proven track record of picking revolutionary growth stocks early, from Netflix to Amazon, so become a premium member today.

See the 'AI Supercycle' Stock

More on Dividend Stocks

The sun sets behind a power source
Dividend Stocks

Outlook for Fortis Stock in 2025

Fortis is up 15% in the past year. Are more gains on the way?

Read more »

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

Where to Invest Your $7,000 TFSA Contribution 

The investment environment is seeing a shift in 2025. Here is an investment strategy to consider for your $7,000 TFSA…

Read more »

Canadian Dollars bills
Dividend Stocks

1 TSX Stock to Invest $20,000 and Create $835.80 in Passive Income

If you want passive income, you want security. And you can get it with this top-notch dividend stock.

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

TFSA-Ready: 2 Low-Risk TSX Dividend Stars

These safe, dividend-paying stocks could help your TFSA grow faster than you think in the long run.

Read more »

senior man smiles next to a light-filled window
Dividend Stocks

5 Stocks for Canadian Value Investors

These five stocks all trade at compelling valuations, making them five of the best value stocks Canadian investors can buy…

Read more »

Income and growth financial chart
Dividend Stocks

The 2 Best TSX Stocks to Buy Before They Recover

These TSX stocks are the perfect pair for TFSA investors, especially if you're looking for growth in 2025.

Read more »

protect, safe, trust
Dividend Stocks

2 Safer, High-Yield Dividend Stocks for Canadian Retirees

Consider Restaurant Brands International (TSX:QSR) and another fast-food stock for a juicy dividend.

Read more »

Canadian Dollars bills
Dividend Stocks

TFSA Investors: Transform Your Money Goals Into Cash-Gushing Monsters With $10,000

The TFSA is the perfect place to produce major income, and this stock could be the perfect pairing.

Read more »