The Top Canadian Stocks for Beginners in February 2025

Key takeaways

Stable and Reliable Choices for Beginners – These stocks are from industries with strong market positions, making them lower-risk options for new investors looking for steady growth and dividends.

Canada’s Stock Market is Built on Dividends – Many of the best beginner-friendly stocks, like banks, utilities, and telecoms, offer consistent and growing dividends, providing reliable income alongside capital appreciation.

Economic and Sector Trends Matter – Factors like interest rates, regulatory changes, and technological advancements impact these companies, making it important for investors to stay informed about broader market conditions.

3 stocks I like better than the ones on this list.

Sure, it’s possible to have a secure retirement if you avoid the stock market. It just isn’t very likely. That’s why every investor should own Canadian stocks.

The stats don’t lie. Overall, Canadian households who own stocks are wealthier than those who don’t. Good things happen for investors who funnel excess cash into ownership stakes in Canada’s finest companies.

Choosing a path with investing

The hard part, as always, is the execution. Especially for folks just getting started in the stock market. How exactly do you buy a stock, anyway? Which broker should you use? How do you choose which stocks are best? Is there an overarching strategy to it all? It’s all so daunting, especially for those who have no idea where to start.

Don’t sweat it. It’s easier than you think.

There are two ways to invest in stocks

You can take the direct path and own stocks directly or the indirect path and own funds. These funds then take positions in stocks, bonds, and other financial interests.

Each form has certain advantages and drawbacks. Let’s start with indirect investments, which may be easier for the beginning investor. Rather than picking and choosing individual stocks, passive investors put their money in mutual funds, and professional portfolio managers take care of the rest.

But there are drawbacks to this strategy. These funds charge fees, and it’s difficult for rookie investors to know what’s reasonable and what isn’t. They’re also typically sold by investment advisors, who get a cut of the fees.

And even though intelligent people manage these funds, the high costs generally mean they underperform their benchmarks over time.

Lower fee versions of these funds exist that trade directly on the stock exchange called exchange-traded funds (or ETFs). Investors save on costs, but in exchange, they don’t get the level of service provided by investment advisors.

Choosing your own stocks is good because you have total control over your account. But it can also be daunting. Choosing the best stocks can be difficult, especially for someone just starting out.

But it’s easily achievable. Some 60% of Canadian investors recently reported they’re self-directed investors. If they can do it, why can’t you?

With that said, lets dig into some of the best Canadian stocks for beginners right now.

Canada’s largest bank

Royal Bank of Canada (TSE:RY)

Royal Bank of Canada (RBC) is the biggest bank in Canada by market capitalization, serving over 17 million clients worldwide. It operates across multiple segments, including personal and commercial banking, wealth management, and capital markets. RBC is known for its strong balance sheet, consistent dividend growth, and leadership in digital banking.

P/E: 14.8

5 Yr Revenue Growth: 4.2%

5 Yr Earnings Growth: 4.7%

5 Yr Dividend Growth: 6.1%

Yield: 3.4%

  • Canada’s largest and most stable bank
  • A track record of strong dividend growth
  • Highly diversified revenue streams
  • Expanding presence in the U.S. wealth management market
  • Strong digital banking adoption for future growth
  • Resilient even during economic downturns
  • Interest Rates – Higher interest rates can boost profits, while lower rates can tighten margins.
  • U.S. Expansion – RBC’s growing U.S. wealth business could drive future earnings.
  • Tech & Fintech Competition – Digital banking advancements and fintech disruptors are shaking up the industry.
  • Regulatory Changes – Banking regulations can impact profits and capital requirements.
  • Economic Slowdowns – A weak economy can lead to more loan defaults.
  • Housing Market Exposure – A major downturn in Canadian real estate could hurt RBC’s loan portfolio.
  • Regulatory Hurdles – Governments can impose stricter banking rules.
  • Competition from Fintech – Rising competition from digital banks and fintech startups.

A leading Canadian telecom provider

TELUS (TSE:T)

TELUS is one of Canada’s top telecom companies, offering mobile, internet, and TV services nationwide. It stands out for its customer service and investment in fiber-optic technology. The company also has a fast-growing health-tech business, TELUS Health, providing digital healthcare solutions.

P/E: 33.5

5 Yr Revenue Growth: 7.3%

5 Yr Earnings Growth: -15.4%

5 Yr Dividend Growth: 6.7%

Yield: 7.4%

  • Reliable, recession-resistant business model
  • Strong market position in Canada’s telecom industry
  • Growing revenue from TELUS Health and TELUS Agriculture
  • Attractive and growing dividend
  • High-speed fiber-optic network expansion
  • 5G rollout could boost future growth
  • 5G Expansion – Next-gen networks could drive new revenue streams.
  • TELUS Health Growth – Increasing demand for digital healthcare services.
  • Regulatory Landscape – Government rules on pricing and competition can affect profits.
  • Fiber-Optic Network Expansion – Faster internet means happier customers and higher revenue.
  • Competition – Rogers, Bell, and smaller players are constantly fighting for market share.
  • Regulatory Pressure – Government intervention could limit pricing power.
  • High Debt Levels – Telecom is capital-intensive, and high debt could be a burden.
  • Technology Disruptions – New tech could change how telecom companies operate.

Global convenience store giant

Alimentation Couche-Tard (TSE:ATD)

Couche-Tard is a worldwide leader in convenience stores, operating brands like Circle K in North America, Europe, and Asia. The company generates revenue from fuel sales and in-store purchases, making it a defensive, recession-resistant business.

P/E: 20.9

5 Yr Revenue Growth: 3.7%

5 Yr Earnings Growth: 12.3%

5 Yr Dividend Growth: 24.2%

Yield: 0.9%

  • Global footprint with over 14,000 stores
  • Reliable, steady cash flow even in downturns
  • Growth through acquisitions and organic expansion
  • Strong profitability with a history of share buybacks
  • Fuel sales add stability alongside retail revenue
  • Digital initiatives improving customer experience
  • Electric Vehicle Shift – Gas station businesses are adapting to EV charging.
  • Acquisitions – Couche-Tard’s expansion strategy relies on smart purchases.
  • Consumer Behavior – More demand for convenience and premium store offerings.
  • Inflation Impact – Rising costs could squeeze profit margins.
  • Fuel Dependency – Long-term shift to EVs could hurt fuel sales.
  • Integration Challenges – Acquisitions don’t always go smoothly.
  • Currency Fluctuations – International business means forex risks.
  • Regulatory Issues – Government rules on retail and fuel sales can impact profits.

Canada’s largest railway company

Canadian National Railway (TSE:CNR)

CNR operates an extensive rail network that transports goods across North America. As a key player in the supply chain, the company benefits from long-term demand for freight transport.

P/E: 21.7

5 Yr Revenue Growth: 2.7%

5 Yr Earnings Growth: 3.8%

5 Yr Dividend Growth: 9.5%

Yield: 2.2%

  • Essential part of North America’s economy
  • Strong pricing power and stable revenue
  • Efficient operations and cost management
  • A leader in sustainability and rail innovation
  • Dividend growth history with steady returns
  • Defensive, recession-resistant business
  • Supply Chain Disruptions – Rail transport demand rises when trucking faces challenges.
  • Economic Growth – More trade means more shipments.
  • Regulatory Changes – Rail safety and emissions rules can impact operations.
  • Fuel Efficiency Improvements – Lower fuel costs help margins.
  • Economic Slowdowns – Less shipping demand in downturns.
  • Labor Strikes – Rail unions have strong bargaining power.
  • Regulatory Hurdles – Government rules can impact operations.
  • Competition from Trucking – The trucking industry is always evolving.

A stable utility giant

Fortis (TSE:FTS)

Fortis is one of Canada’s largest utility companies, providing electricity and gas to millions of customers. Its regulated business model ensures stable, predictable revenue.

P/E: 19.2

5 Yr Revenue Growth: 6.5%

5 Yr Earnings Growth: 3.7%

5 Yr Dividend Growth: 5.8%

Yield: 3.9%

  • Essential services make it recession-proof
  • Long history of dividend increases
  • Regulated earnings provide consistent cash flow
  • Expanding renewable energy investments
  • Strong presence in North America
  • Low volatility, ideal for conservative investors
  • Renewable Energy Growth – Transitioning to cleaner energy.
  • Regulatory Changes – Utilities are heavily regulated.
  • Interest Rate Impact – Rising rates affect borrowing costs.
  • Infrastructure Investments – Ongoing upgrades boost long-term value.
  • Interest Rate Sensitivity – Higher rates make borrowing more expensive.
  • Regulatory Risks – Government decisions impact pricing and operations.
  • Natural Disasters – Extreme weather can disrupt service.
  • Slow Growth – Utility stocks aren’t high-growth plays.

Canada’s largest property and casualty insurer

Intact Financial (TSE:IFC)

Intact Financial provides home, auto, and business insurance across Canada. Its consistent underwriting discipline and smart acquisitions make it a leader in the industry.

P/E: 22.3

5 Yr Revenue Growth: 15.8%

5 Yr Earnings Growth: 7.9%

5 Yr Dividend Growth: 9.5%

Yield: 1.9%

  • Largest P&C insurer in Canada
  • Strong underwriting profitability
  • Growing through smart acquisitions
  • Consistent dividend growth
  • Well-positioned for inflation-driven premium hikes
  • Defensive business model, resilient in downturns
  • Catastrophic Weather Events – More claims from extreme weather.
  • Insurance Premium Increases – Higher rates boost revenue.
  • Acquisitions – Expanding into new markets.
  • Tech & AI in Insurance – Improving claims processing efficiency.
  • Climate Change Impact – More extreme weather = higher claims.
  • Regulatory Pressure – Government oversight on pricing.
  • Market Cycles – Insurance pricing follows cyclical trends.
  • Competition – Other insurers fighting for market share.

The parent company of Tim Hortons, Burger King, and Popeyes

Restaurant Brands International (TSE:QSR)

RBI owns some of the world’s biggest fast-food brands, generating revenue through franchising. Its global presence and strong brand recognition make it a stable pick.

P/E: 15.4

5 Yr Revenue Growth: 5.6%

5 Yr Earnings Growth: 9.2%

5 Yr Dividend Growth: 4.1%

Yield: 3.8%

  • Iconic global brands with loyal customers
  • Strong franchise model minimizes risk
  • Expanding international presence
  • Dividend growth potential
  • Digital ordering and delivery growth
  • Cost-cutting efforts improving profitability
  • Digital & Delivery Growth – More mobile orders and food delivery.
  • Menu Innovation – New items keep customers engaged.
  • Franchise Growth – Expanding store count worldwide.
  • Consumer Spending Trends – Economic downturns impact fast food sales.
  • Inflation Pressures – Higher food and labor costs.
  • Brand Reputation – A single PR issue can hurt sales.
  • Franchisee Relations – Conflicts can slow expansion.
  • Competitive Landscape – Fierce competition in fast food.

How do you actually buy these stocks?

Self-directed investors do everything themselves, including choosing the stocks to buy and inputting orders into a trading platform. There’s no need to talk to a human; this is all done online.

Ultimately, you need a brokerage to do it.

Many investors struggle at this point since many online brokers tend to have very similar features. Choosing the best brokerage account isn’t that important. They’re mostly the same, anyway. Choose one that best matches your needs and go with it.

A few of our favourite online brokerage accounts include QtradeQuestrade, and RBC Direct Investing. These accounts allow investors to purchase stocks easily while offering low trading fees and good customer service. You can also set up separate TFSA and RRSP accounts.

Wealthsimple Trade also offers commission-free trading, making it the cheapest discount brokerage in Canada.

The trading process itself is pretty straightforward, but there are a few things you’ll want to know

Like an auction, stocks have bid and ask prices. The bid price is the current price buyers are willing to pay. The asking price is the price sellers are willing to sell at. Most large stocks have a minimal spread between the bid and the asking price, but smaller names will have a more extensive spread.

When you purchase a stock, you can submit several kinds of orders. One is a market order, which purchases the stock without worrying about price. This is fine if there are a lot of buy and sell orders, but it’s a terrible idea for illiquid stocks.

If you’re buying a stock with a big spread between the bid and the ask prices, you’ll want to use a limit order. The limit price is set as the maximum you’re willing to pay. If the asking price doesn’t cooperate, the order will go unfilled.

There are also stop orders, which only become effective once a stock trades at or through a specific price. Once the price is reached, the stop order becomes a market order.

These are just a few points to get started with when learning how to buy stocks.

Some general tips on choosing stocks

One of the investment world’s dirty little secrets is that there’s an army of investment advisors, salespeople, and hedge fund managers who have a vested interest in convincing investors they can’t do it themselves. After all, they directly benefit when investors take the passive route.

Investing can be incredibly complicated, but it doesn’t need to be. Many do-it-yourself investors outperform professionals by sticking to the basics.

The first thing to remember is that an investment in a stock is an ownership stake in an underlying business. The current stock price can fluctuate wildly. Ultimately, the company’s health determines the stock’s overall success, which translates into capital gains.

You’ll want to focus on stocks that increase revenue, earnings, and dividends consistently.

It’s also essential for new investors to invest in things they understand. The beauty of the stock market is that there are thousands of stocks out there. Investors can easily discard the ones they don’t understand, and the supply is virtually limitless.

Many of the most successful investments of all time have been products and services you use every day.