Written by Ambrose O'Callaghan at The Motley Fool Canada
Young investors who are just starting out with their personally managed portfolio should look to follow time-tested strategies.
First, Canadian investors just starting out must make a commitment to diversify their portfolio. Second, you should seek to use tax-friendly tools and registered accounts that are at your disposal. For example, the Tax-Free Savings Account (TFSA) is flexible, easy to use, and all capital gains and income generated in the account are free from taxation. Finally, young investors must remind themselves to be patient as they start out. Seek out equities that are geared up for long-term success, and steel yourself during volatile periods.
Today, I want to zero in on four TSX stocks that provide a balance of growth, income, and dependability. Let’s jump in.
This TSX stock has delivered huge growth since its 2020 dip
goeasy (TSX:GSY) is the first TSX stock I’d recommend for young investors in late August 2023. This Mississauga-based company provides non-prime leasing and lending services under the easyhome, easyfinancial, and LendCare brands to Canadian clients. Shares of goeasy have dipped marginally over the past month. However, the stock is still up 17% so far in 2023.
In the second quarter (Q2) of fiscal 2023, this company delivered revenue growth of 20% to $252 million. Meanwhile, its loan portfolio increased 35% to $3.20 billion. Better yet, adjusted diluted earnings per share (EPS) jumped 16% to $3.28.
This TSX stock currently possesses a very favourable price-to-earnings (P/E) ratio of 11. Moreover, goeasy has delivered nine straight years of dividend growth. The Dividend Aristocrat offers a quarterly distribution of $0.96 per share. That represents a 3% yield.
Don’t sleep on this tech stock as the AI boom continues
Young investors have undoubtedly heard about the explosion of interest in artificial intelligence (AI). Kinaxis (TSX:KXS) offers investors exposure to machine learning technology and AI development, as this Ottawa-based company provides cloud-based subscription software for supply chain operations to a global client base. This TSX stock has climbed 7.4% in the year-to-date period.
In Q2 2023, the company delivered total revenue growth of 31% to $105 million. Meanwhile, gross profit jumped 28% to $63.6 million. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) surged 47% to $15.2 million.
Shares of this TSX stock are trading in favourable value territory compared to its industry peers. Better yet, Kinaxis is on track to post very strong earnings growth going forward. This is a tech stock that young investors should not ignore.
Young investors should feel good about owning bank stocks for the long haul
Royal Bank (TSX:RY) is the largest financial institution in Canada and the largest stock on the TSX Index by market capitalization. Bank stocks might not stir conversations at cocktail parties, but they offer a great balance of consistent capital growth and income. Shares of Royal Bank have dropped 4.2% in 2023. Now is a great time to buy the dip in this profit machine.
Shares of this bank stock currently possess an attractive P/E ratio of 12. Moreover, Royal Bank offers a quarterly dividend of $1.35 per share, which represents a solid 4.4% yield.
One more exciting TSX stock I’d suggest for a young investors’ portfolio
WELL Health Technologies (TSX:WELL) is the fourth and final TSX stock I’d suggest for young investors in the late summer season. Based in Vancouver, WELL Health operates as a practitioner-focused digital health company in North America and around the world. Its shares have shot up 52% in the year-to-date period.
Young investors should be excited about the growth potential of telehealth, which erupted during the COVID-19 pandemic. Remote health care has continued to grow in the aftermath of the pandemic. In Q2 2023, this company achieved record quarterly revenues of $170 million and record adjusted EBITDA of $27.8 million.
Before you consider goeasy, you'll want to hear this.
Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in August 2023... and goeasy wasn't on the list.
The online investing service they've run for nearly a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 26 percentage points. And right now, they think there are 5 stocks that are better buys.
See the 5 Stocks * Returns as of 8/16/23