Investing in high-quality Canadian stocks with sound fundamentals can help investors generate stellar returns. Moreover, you don’t need much money to get started. With just $50, you can begin purchasing top TSX stocks and gradually build a diversified portfolio. Over time, this can result in significant wealth, thanks to the compounding effect and potential for long-term gains. Against this backdrop, here are the top Canadian stocks to buy under $50.
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Hydro One
Hydro One (TSX:H) is one of the top Canadian stocks to consider under $50. It offers stability, income, and growth. Hydro One is engaged in electric power transmission and local distribution. The company has no exposure to power generation and remains immune to commodity price volatility, which adds stability to its operations and enables it to generate steady earnings.
Hydro One benefits from a low-risk business model that is less susceptible to economic downturns. This makes it a compelling investment for those seeking reliable returns. Further, with its strong balance sheet, the company does not require external equity funding for growth, which enhances its financial stability.
Hydro One’s expanding rate base and solid cash flow position the company to make strategic investments in refurbishing aging infrastructure while maintaining an attractive dividend payout. The utility company’s commitment to enhancing shareholders’ value is evident in its consistent dividend growth. Since 2016, Hydro One has steadily increased its dividend, driven by its low-risk earnings and strong cash flows. Further, Hydro One stock has surged 111% in five years, delivering an average annualized return of about 16%.
The company projects its rate base to grow at a CAGR of 6% through 2027, which implies that its earnings will continue to increase. This will drive its dividends and stock price.
WELL Health
WELL Health Technologies (TSX:WELL) is another attractive TSX stock to buy under $50. The stock is trending higher, reflecting the digital healthcare company’s solid financials over the past several quarters.
During the last reported quarter (Q3), WELL Health surpassed the $1 billion mark in annualized revenue run rate, one quarter ahead of schedule. The company’s impressive revenues were driven by stellar growth in its Canadian Patient Services segment. Further, its top line benefitted from its strategic acquisitions.
The momentum in WELL Health’s business will likely sustain, driving its share price higher. The company will benefit from increased patient visits and its aggressive acquisition strategy. Moreover, WELL Health’s extensive network of clinics, focus on developing and selling proprietary software and technology solutions, and significant opportunities in the high-margin affiliate clinic licensing business will likely support its growth. Moreover, the company’s ongoing efforts to boost its cash flows and reduce debt are positive and will support its share price.
CES Energy Solutions
Investors looking for under $50 stocks can also consider CES Energy Solutions (TSX:CEU) stock. The company manufactures advanced chemical solutions for the energy sector. Shares of CES Energy have spiked about 196% in one year, led by stable upstream activity, the growing adoption of advanced chemical technologies, and heightened service intensity.
CES’s specialized solutions are in high demand due to the growing complexity of oil and gas extraction in North America, where the company has high exposure. CES also benefits from techniques like longer lateral drilling, intensive hydraulic fracturing, and pad optimization, which require advanced chemical solutions. As operators push for higher efficiency, CES remains well-positioned to capture growing market share with its innovative production and drilling chemicals that help maximize output.
Further, its recurring revenues from production chemicals provide stability in its financials in all market conditions. Its asset-light business model is poised to weather the industry’s cyclical changes. The company’s strong balance sheet will continue to ensure steady cash flows. Moreover, favourable commodity pricing across North America is a tailwind, making it a compelling investment for long-term investors.
