3 Blue Chip Stocks New Investors Should Buy Today
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It wouldn’t be outrageous to think that new investors are a little hesitant to pump new money into the stock market today. This is because the market has been very volatile over the past year. At times like these, I would suggest new investors stick to buying stocks of blue chip companies. It’s not that these stocks won’t drop from time to time, but that these companies have the best chance of surviving in the long run. Here are three top stocks new investors should buy today.
Buy one of the banks
My first recommendation for new investors is to consider buying one of the banks. The Canadian banking industry is highly regulated, making it a relatively safe area in which to invest. Companies that dominate the industry have also managed to establish formidable moats over the past hundred years. This makes it very difficult for smaller competitors to move their position to the top of the industry. Moreover, the rise in interest rates makes it a very good environment for investing in financial institutions.
Of all the Canadian banks, my top pick is Bank of Nova Scotia (TSX:BNS)(NYSE:BNS). What interests me in this company is its desire to develop internationally. In 2021, nearly a third of its revenue came from sources outside of Canada. The Bank of Nova Scotia is also an excellent dividend-paying stock. It has paid shareholders a portion of its profits in each of the past 189 years.
Another financial institution for your portfolio
If you look at the Canadian stock market, you will notice that a large portion of it is represented by financial institutions. Although it doesn’t really lend itself to the most interesting companies, it does give investors plenty of opportunities to buy shares of stable businesses. Another financial institution that new investors should consider buying today is Brookfield Asset Management (TSX: BAM.A)(NYSE: BAM).
With approximately $725 billion in assets under management, Brookfield is one of the largest alternative asset management companies in the world. Through its subsidiaries, it is exposed to the infrastructure, real estate, renewable energy and private equity markets. Brookfield is also known for its CEO. Bruce Flatt, often dubbed the Warren Buffett of Canada, is perhaps one of the greatest investors of his time.
Invest in this reliable company
Finally, investors should consider buying shares of Canadian National Railway (TSX: CNR)(NYSE: CNI). Known as Canada’s largest railway company, Canadian National operates nearly 33,000 km of track. Its rail network stretches from British Columbia to Nova Scotia and extends as far south as Louisiana.
Canadian National is also known as the Canadian Dividend Aristocrat. It has managed to increase its dividend payout in each of the past 25 years. This makes it one of 11 TSX-listed companies to take this step. Currently, there is no viable way to transport large quantities of goods over long distances except by rail. With that in mind, and the benefits that come with an investment in Canadian National, it seems like a no-brainer for new investors today.