5 Top Canadian Stocks to Buy With $500 (2024)

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Which stocks can you buy with $500? Can they give good returns and reduce risk? Here is a simple portfolio you could consider.

$500 can help you buy shares of five companies operating in different sectors, giving you a good mix of growth and dividends. Here is how you can diversify your $500 to mitigate risk and accelerate returns.

BCE stock

Telco BCE (TSX:BCE) is a stock worth buying at its 10-year low of $47. The stock has slipped as rising interest rates, price competition with rivals, and business restructuring has hurt its profits and cash flows in 2024. These headwinds are gradually easing as it has stopped the price war, and Canada has begun rate cuts. Thankfully, a majority of the telco’s debt is in Canadian dollars, giving it the benefit of lower interest expense in the coming year. Moreover, cost savings and revenue optimization from restructuring will be reflected from next year onwards.

You could consider buying two shares for $94 and lock in an 8.48% annual dividend yield and a 28% recovery rally in the coming two years.

Hive Digital Solutions

HIVE (TSXV:HIVE) is a high-growth, high-risk stock that derives its stock value from the Bitcoin inventory it mines and holds. While it has expanded its revenue stream to rent its high-performance data centre cloud capacity, that business has yet to generate meaningful returns to affect the stock price. Bitcoin prices tend to perform well in a strong economy that enjoys high investor confidence.

You could consider investing $100 to buy 23 shares for $4.33 per share and sell it when the stock price crosses the $6 price, generating a 39% return.And if you are considering holding the stock for the long term, your returns could multiply in the next crypto bubble.

Dye & Durham stock

Dye & Durham (TSX:DND) has been focusing on organic growth and diversifying its workflow management software, Unity, to legal and financial professionals in verticals other than real estate. Its high concentration on the real estate transactions segment pulled the stock down when property transactions slowed. However, interest rate cuts and recovery in real estate are starting to reflect in the earnings. The stock has been trading closer to its initial public offering (IPO) price as it gradually absorbs the high financing cost from two failed acquisitions of TM Group and Link.

Buying the stock at the dip can help you lock in the future growth from the real estate recovery and the organic growth its platform enjoys. DND’s stock price surged more than 100% between November 2023 and March 2024 for the above reasons. A $100 investment can buy you seven shares of DND, which have the potential to double your money in the long term.

Two dividend stocks

Timbercreek Financial (TSX:TF) and Power Corporation of Canada (TSX:POW) are worth a buy for their dividend income.

The short-term mortgage lender Timbercreek Financial reached the peak of interest income last year. The interest rate cuts this year will reduce the net income but increase revenue from loan processing fees as REITs return to taking loans. This stock can give you dividends in any scenario as short-term loans help it benefit from high loan volumes in a low-interest environment and high interest in a high-interest environment. The only major risk is the borrowers defaulting, and the lender has tools and processes to keep credit risk at a minimum.

POW is the holding company of Canada Life and IGM Financial and benefits from both investment management and insurance services. POW gets regular dividends from its operating companies, making it a stock you might want to seek for its dividends. It has been growing its dividends per share at an average annual rate of 6%. Both these stocks are range-bound, so do not expect much capital appreciation.