Investing in stocks can be a great way to build your retirement nest egg. However, if you don’t know what you’re doing, it can also be an unfortunate way to throw away your hard-earned money. Just like you wouldn’t buy a home on impulse because a bad decision could cost you in a big way, you shouldn’t buy stocks without doing extensive research first.
If you’re considering investing in a company, you need to first read their financial reports and look at factors like how they make their money, how they’re managing the income they make, what risks they potentially face, their market capitalization (or market cap for short), which is the value of the company on the stock market, their net income, price-to-earnings (or P/E ratio), return on equity, their values as a company and who’s in charge.
Remember: you should always do your own research and get expert advice when making any financial decisions.
With that said, let’s look at some of the stocks available right now in Canada.
Lockdowns during the pandemic meant that shoppers went the online route like never before, making e-commerce some of the best stocks to consider. E-commerce platform Shopify, for example, provides a space where more than 1,750,000 businesses in around 175 countries can sell their products online.
Shopify has become one of Canada’s largest publicly traded company by market cap, which was $393.1 in June 2022. In 2021, it had total revenue of $4.6 billion and a net income of $2,914.7 million. While this isn’t nearly as much as Amazon makes, Shopify’s stock price doesn’t tend to be too volatile.
Royal Bank of Canada
Bank stocks are generally considered relatively safe to invest in if you’re looking for long-term investments. Banks are subject to strict regulation, which helps keep stock prices relatively steady, mitigating the risks associated with falling interest rates and loan defaults.
Royal Bank of Canada — or RBC, as most of us call it — is not only Canada’s largest financial institution, but also its largest company by market cap, which was $137.36 billion in June. In 2021, RBC had revenue of $46 million and a net income of $12.6 billion. Having been around since 1864, RBC got its current name in 1901.
It’s always a good idea to invest in companies that provide essential services: their stocks tend to grow steadily in value over the long term. One essential service nobody can do without, especially now that so many of us still have remote and work-from-home jobs, is telecommunications, including mobile services and internet.
BCE is the holding company that owns Bell Canada, the country’s largest telecom provider. It’s among the country’s top 15 largest companies by market cap: $48 billion in June 2022. It had revenue of $18.7 billion and a net income of $2.2 billion in 2021. BCE stocks are unlikely to see a sudden, huge drop in value. On the contrary, their value has been surging because of the growth potential of 5G.
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Descartes Systems Group
Global supply chain problems have highlighted the importance of good logistics and supply chain management.
Descartes Systems Group is a Waterloo, Ont.-based tech company that provides logistics and supply chain management software to help get goods from the producer to the store shelves or to your door. In June 2022, the company had a market cap of $5.3 billion. In 2021, its revenue was $348.7 million and its net income $52 million. Descartes stocks haven’t shown spectacular surges in value but with small rises and dips, their value has grown steadily in the long term.
Another good bet in the supply chain field is Kinaxis, an Ottawa-based company that specializes in supply chain management and sales and operations planning software. Kinaxis was founded in 1984 as Cadence Computer Corporation and did supply chain analysis. It got its current name in 2005, when the focus shifted to selling its software on a subscription basis.
Kinaxis had a market cap of $3.4 billion in June 2022. The company’s revenue in 2021 was $251 million and its net income was $14 million. While these numbers may not seem mind-boggling, analysts say that Kinaxis has great long-term potential. If you value companies that value carbon neutrality, Kinaxis reached carbon neutrality in 2020.
Speaking of carbon neutrality: energy is another essential and its future lies in renewables like wind, solar and natural gas. The green energy industry is not only where you’ll find some of the most in-demand jobs for 2025 and beyond, but also where you may expect to see the value of investments increase as more people make the switch.
Toronto-based Northland Power is a leader in the industry. The company has power plants in Ontario, Quebec and Saskatchewan as well as in Germany, The Netherlands and Colombia, using onshore and offshore wind, the sun, biomass and natural gas as energy sources. In June this year, Northland Power had a market cap of $8.86 billion. Its revenue in 2021 was $1.7 billion and its net income was $270 million.
Because the pandemic pretty much grounded the airline’s passenger fleet in 2020, Air Canada operated at a loss with revenue of $4.6 billion and a net income of –$3.8 billion. In 2021, the annual revenue raked in $5.1 billion with a net income of $-2.9 billion. With more travel restrictions mostly easing around the world, though, passengers are slowly returning to Canada’s flagship carrier, even as it experiences some kinks in resuming operations. In addition, the airline has expanded its cargo network, which isn’t as sensitive to pandemics. In June last year, the airline had a market cap of $5.1 billion.
WELL Health Technologies
Healthcare is usually another good investment to consider.
Since the pandemic started, WELL Health Technologies has seen rapid growth since it went public on the Toronto Stock Exchange in January 2020. One of the main reasons for this has been the move to telehealth as family physicians’ offices closed during lockdown and people didn’t want to go to the emergency department for common health concerns. WELL Health Technologies also owns and operates outpatient health clinics across Canada and the United States. In June last year, the company had a market cap of $726.6 million. Its revenue in 2021 was $302.3 million with a net income of $16 million. However, WELL Health Technologies has also diversified into clinical database management, billing, digital apps, cybersecurity and the like, plus has expanded through several mergers and acquisitions recently.
Covid-19 has changed many things about the way we live and work. For example, a lot people have decided to forego public transit and invest in their first cars instead so that they could maintain social distancing. This has meant an increase in car sales — as long as there was inventory. The shortage of supply in the automotive industry at the moment is largely due to the global supply chain crisis. As soon as this is resolved, car sales should increase again and as long as people buy cars, there will be a need for car parts.
Magna International is North America’s largest manufacturer of automobile parts and is one of Canada’s top 30 largest companies by market cap: $17 billion in June 2022. In 2021, Magna’s revenue was $36.2 billion and their net income was $1.5 billion.
Hive Blockchain Technologies
A cryptocurrency like Bitcoin can be highly volatile, but may give incredible short-term yields (and losses). Unfortunately, it’s also easy to get scammed if you don’t know what you’re doing. Hive Blockchain Technologies, however, allows you to invest in cryptocurrency in the highly regulated stock market, which could help reduce the risk.
The company had a market cap of $0.24 billion in June in 2022. In 2021, revenue was $67 million and net income $42.5 million. If you don’t like risk, this isn’t one of the best Canadian stocks to consider.
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