The equity market has grown substantially over the past year. Thanks to the uptrend, several TSX stocks have risen significantly in value. Despite the growth, a few fundamentally strong stocks are a no-brainer to buy and hold in all market conditions. These stocks offer a balanced mix of stability, income, and growth potential, making them attractive long-term investments. With this background, here are my top two TSX stocks to buy right now.
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Stock #1
Dollarama (TSX:DOL) is a top Canadian stock to buy right now. The discount retailer is known for its resilient business model, offering stability, growth, and income. Dollarama sells a broad range of consumable products, general merchandise, and seasonal items at low and select fixed price points up to $5.00.
Its wide assortments and value pricing consistently attract consumers from all walks of life, driving its financials and share price regardless of market conditions. Thanks to Dollarama’s solid financials, its stock has consistently outperformed the broader market index. For instance, Dollarama stock is up about 50% year-to-date, significantly surpassing the S&P/TSX Composite Index’s gain of 18%. Moreover, Dollarama stock is up over 218% in five years, beating the benchmark index’s gain of 50% by a wide margin.
In addition to above-average capital gains, Dollarama has enhanced its shareholders’ value by increasing its dividend 13 times since 2011.
Dollarama continues to expand its network across the country, which will boost its top line in the coming years. Further, Dollarama is adding convenience for Canadian customers through its online offerings. Its compelling value proposition, a wide variety of assortments, and broad customer base will continue to drive its top line. Higher sales and a focus on improving the efficiency of its operations will cushion its earnings, support higher dividend payments, and drive the share price higher.
Stock #2
Canadian Natural Resources (TSX:CNQ) is one of my top picks for steady dividend income and capital gains. The company is Canada’s leading crude oil and natural gas producer and is famous for growing its dividends at a solid pace and returning higher cash to its investors.
The energy company’s diverse portfolio of assets helps mitigate risk across commodity cycles and optimize capital investments. Further, its long-life, low-decline production assets add resilience to its financials. The company’s high-quality asset base, low reserve replacement costs, and focus on improving efficiency help Canadian Natural Resources generate solid earnings and cash flows and weather market fluctuations.
In addition, Canadian Natural Resources has a substantial inventory of low-capital-intensive projects within its conventional asset base. These projects offer solid returns. Moreover, the company’s vast, underdeveloped land base bodes well for future growth.
Thanks to its growing earnings base, Canadian Natural Resoruces has increased its dividend at a compound annual growth rate (CAGR) of 21% in the last 25 years. Moreover, its stock has grown at a CAGR of over 30%, delivering capital gains of 283% in five years.
In summary, Canadian Natural Resources is poised to deliver solid capital gains and steady dividend income.
