Written by Andrew Button at The Motley Fool Canada
If you have $1,500 to invest, there are many ways to invest it. A good option would be to invest it in index funds, which are some of the least risky stock investments you can make. Index funds reduce your risk by “spreading your eggs among many baskets,” thereby limiting your exposure to potential corporate disaster. They also tend to deliver good returns over time.
That doesn’t mean investing in individual stocks is pointless. On the contrary, if you want a chance to outperform the index without using leverage, individual stocks are practically a must. In this article, I’ll examine three individual stocks you could invest $1,500 in. Of course, you should always keep in mind the importance of diversification; The Motley Fool generally recommends at least 25 stocks. The three in this article could be good portfolio additions, but do not represent a sufficiently diversified portfolio on their own.
Suncor Energy
Suncor Energy Inc (TSX:SU) is a TSX Energy stock with a dividend yield of 4.35%. The stock has performed well over the past year, up 13.6%.
Suncor is well known throughout Canada. It operates the popular petrol station chain Petro Canada. It also has some business of exporting petroleum products to the United States.
One thing Suncor currently has to offer is a very favorable valuation. At today’s prices, Suncor is trading at the following prices:
This stock is very cheap given last year’s earnings. Oil prices aren’t as high now as they were for most of 2022, so Suncor’s earnings are likely to fall somewhat in 2023. However, given Suncor’s aggressive debt repayments, it’s possible that earnings won’t fall as sharply as oil prices would predict.
Royal Bank
Royal Bank of Canada (TSX:RY) is a great Canadian bank stock. The company is around 170 years old, making it the second oldest bank in Canada. Canadian banks are doing well this year thanks to the Bank of Canada’s rate hikes. In the most recent quarter, RY delivered a 4% increase in adjusted earnings. Its GAAP income (income including non-recurring and irregular items calculated under government accounting standards) declined 19%, but that was mostly due to some tax changes and the Canada Recovery Dividend. Looking at the factors that are likely to repeat themselves in the future, the Royal Bank trailed a reasonably decent quarter overall. Nonetheless, the stock is fairly cheap, trading at just 11.6 times earnings and boasting a 4% dividend yield. Not bad value if you ask me.
Nutrition Couche Tard
Nutrition Couche-Tard Inc (TSX:ATD) is a Canadian convenience store company. The retailer has grown significantly over the years. It brought the Circle K chain to Canada by buying it ConocoPhillips in the 2000s. ATD later expanded Circle K by purchasing Irving gas stations. Today, ATD makes money selling fuel, chips, cigarettes, lottery tickets, and other similar items in its stores. Thanks to the high oil prices that prevail this year, fuel sales have increased significantly in 2022. It should be doing reasonably well this year, although maybe not as well as last year.
The contribution received $1,500? These 3 Stocks You Can Add to Your Portfolio Confidently appeared first on The Motley Fool Germany.
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Stupid contributor Andrew Button has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alimentation Couche-Tard. The Motley Fool has a disclosure policy.
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