13 Best Canadian Stocks To Buy in September 2023

For most Canadian investors, the Toronto Stock Exchange offers plenty of investment opportunities in great Canadian companies.

When looking for the best Canadian stocks on the TSX, investors should look at things like cash flow, revenue growth, PE ratio, dividend yield, and other performance indices.

You can easily invest in the top Canadian stocks by buying them using a discount brokerage platform with lower trading fees.

In this article, we will discuss 13 of the best Canadian stocks to buy in 2023.

Best Stocks in Canada in 2023

It is a volatile time right now for stock investors, but bear markets also provide excellent opportunities to get some undervalued Canadian stocks. Here are 13 of the best Canadian stocks to buy right now.

1. Royal Bank of Canada

• Ticker Symbol: RY.TO
• Sector: Financials
• Market Cap: $191 billion
• PE Ratio: 12.49
• Dividend Yield: 3.82%
• 52-week Trading Range: $116.75-$148.26

Royal Bank is one of the best Canadian bank stocks to own. It was founded in 1864 and is headquartered in Toronto, Ontario.

It is the largest financial institution in Canada by market capitalization and is on the list of global systemically important banks (G-SIBs). These G-SIBs are commonly referred to as institutions that are “too big to fail.”

As of 2022, the Royal Bank of Canada (RBC) had over $1.71 trillion CAD in assets under management and over 16 million clients worldwide.

The stock is a core constituent of the S&P/TSX 60 and pays an annualized dividend yield of 3.82%.

2. BCE Inc 

• Ticker Symbol: BCE.TO 
• Sector: Telecommunications
• Market Cap: $56.33 billion
• PE Ratio: 19.99
• Dividend Yield: 6.27%
• 52-week Trading Range: $55.66-$74.09

BCE Inc, otherwise known as Bell Canada Enterprises, is Canada’s largest telecommunications company by market capitalization. 

The company is dual-listed on the TSX and the NYSE and is a component of the S&P/TSX 60 index of stocks.

Bell Canada also owns several other major Canadian subsidiaries, including major stakes in both the Montreal Canadiens and Maple Leaf Sports and Entertainment. 

BCE is a Canadian dividend aristocrat and has grown its dividend payout at a CAGR of 5%. The stock currently pays out a yield of 6.27% to shareholders. 

3. Bank of Montreal 

• Ticker Symbol: BMO.TO
• Sector: Financials
• Market Cap: $91.51 billion
• PE Ratio: 6.75
• Dividend Yield: 4.24%
• 52-week Trading Range: $113.73-$154.47

The Bank of Montreal is Canada’s oldest bank, having been established in 1817. Today, it is Canada’s third-largest bank behind Toronto Dominion and the Royal Bank of Canada. 

This company has paid its investors dividends since 1829, making it one of the longest dividend-paying streaks in the world. 

As of 2022, the Bank of Montreal had over 12 million customers worldwide, with a total AUM or assets under management of over $884 billion. 

4. Shopify

• Ticker Symbol: SHOP.TO
• Sector: eCommerce Software
• Market Cap: $89 billion
• PE Ratio: 417.24
• Dividend Yield: N/A
• 52-week Trading Range: $33.00-$117.87

Shopify is an Ottawa-based eCommerce platform that was founded in 2016 by current CEO Tobias Lutke. Its stock is dual-listed on the TSX and NYSE and is a constituent of the S&P/TSX 60 index.

As of 2023, over 4.4 million websites use Shopify’s services across 175 different countries worldwide. Shopify’s stock underwent a 10-for-1 stock split in June 2022. 

5. Canadian National Railway

• Ticker Symbol: CNR.TO
• Sector: Railway
• Market Cap: $108 billion
• PE Ratio: 21.61
• Dividend Yield: 1.97%
• 52-week Trading Range: $137.26-$175.39

Canadian National Railway is headquartered in Montreal, Quebec, and was established back in 1919. 

The stock is dual-listed on the TSX and NYSE and is a core component of the S&P/TSX 60 index.

It is Canada’s largest railway by market capitalization and by network size. The network spans from Nova Scotia to British Columbia, or about 32,831 km of track.

The company’s single largest shareholder is Bill Gates, who owns about $7 billion worth of stock, or about 9% of the company.

6. Canadian Natural Resources Ltd

• Ticker Symbol: CNQ.TO
• Sector: Energy
• Market Cap: $86.0 billion
• PE Ratio: 7.58
• Dividend Yield: 4.37%
• 52-week Trading Range: $58.75-$88.18

Canadian Natural Resources is a Calgary-based energy company that was founded in 1973.

It is the largest producer of crude oil in Canada and the largest independent producer of natural gas.

The stock is a component of the S&P/TSX 60 index and pays a generous annualized dividend yield of 4.37%.

7. Enbridge

• Ticker Symbol: ENB.TO
• Sector: Pipeline
• Market Cap: $110.11 billion
• PE Ratio: 20.06
• Dividend Yield: 6.53%
• 52-week Trading Range: $48.88-$59.69

Enbridge is an Alberta-based pipeline company that was established in 1949.

The stock is dual-listed on the TSX and NYSE and is a component of the S&P/TSX 60 index.

Its expansive pipeline system is the longest in North America, with a crude oil system of over 27,500 km and natural gas system of over 38,300 km in length.

Enbridge has one of the highest dividend yields amongst big corporations in Canada, with a generous 6.53% annualized yield.

8. Toronto Dominion Bank

• Ticker Symbol: TD.TO
• Sector: Financial
• Market Cap: $168.36 billion
• PE Ratio: 9.76
• Dividend Yield: 4.15%
• 52-week Trading Range: $77.27-$109.08

Toronto Dominion Bank is a multinational bank that was established in 1955 and headquartered out of Toronto, Ontario.

In 2022, Toronto Dominion briefly surpassed the Royal Bank of Canada regarding assets under management. The two banks continue to jockey for the position of the top bank in Canada. 

The stock is dual-listed on the TSX and NYSE and is a constituent of the S&P/TSX 60 index.

It is also a member of the G-SIBs list, and in 2022 it was the 27th largest bank in the world.

9. Brookfield Asset Management

• Ticker Symbol: BAM.TO
• Sector: Asset Management
• Market Cap: $82.79 billion
• PE Ratio: 18.32
• Dividend Yield: 1.54%
• 52-week Trading Range: $41.29-$63.90

Brookfield Corporation is a Toronto-based multinational asset management company that was originally established in 1899. The current iteration and BN stock symbol were established in December 2022 due to a non-conventional stock split. 

Investors are likely more familiar with the previous symbol BAM.TO. There still is a Brookfield Asset Management that trades under this symbol, but it is not the same entity. BAM.TO as we used to know it is now BN.TO. 

It is dual-listed on the TSX and NYSE and is a constituent of the S&P/TSX 60 index.

As of 2023, it handles over $750 billion USD in assets under management, making it one of the largest alternative investment management companies in the world.

In terms of industries it is involved in, Brookfield focuses on real estate, renewable power infrastructure, and private equity.

10. TC Energy

• Ticker Symbol: TRP.TO
• Sector: Pipeline
• Market Cap: $57.40 billion
• PE Ratio: 17.28
• Dividend Yield: 6.42%
• 52-week Trading Range: $52.12-$74.44

TC Energy is a Calgary-based energy and pipeline industry established in 1951.

The company was established to build the TransCanada Pipeline in 1951 and was originally called the TransCanada Corporation.

It is involved in both crude oil and natural gas pipeline infrastructure, as well as renewable energy generation.

In all, it operates over 92,600 km of natural gas pipelines alone across Canada, the US, and Mexico. 

11. Canadian Pacific Railway

• Ticker Symbol: CP.TO
• Sector: Railway
• Market Cap: $98.63 billion
• PE Ratio: 28.13
• Dividend Yield: 0.72%
• 52-week Trading Range: $86.12-$111.43

Canadian Pacific Railway is a Calgary-based railway that was established back in 1881.

It owns over 20,000 km of railway tracks across seven provinces and into the United States as well.

CP is the second-largest railway company in Canada, behind only the Canadian National Railway Company.

In 2022, Canada Pacific purchased Kansas City Southern to create the only railway network that spans all three countries in North America.

12. Scotiabank

• Ticker Symbol: BNS.TO
• Sector: Financials
• Market Cap: $87.40 billion
• PE Ratio: 9.14
• Dividend Yield: 5.62%
• 52-week Trading Range: $63.19-$95.00

Scotiabank is a Toronto-based bank that was founded in Nova Scotia back in 1832.

It is one of Canada’s big-five banks and is the third-largest in market capitalization behind only Royal Bank and Toronto Dominion Bank.

The stock is dual-listed on the TSX and the NYSE and is a core component of the S&P/TSX 60 index.

As of 2023, Scotiabank operates on several continents, including Europe, Asia, and South America. It also operates an online bank subsidiary Tangerine.

13. Constellation Software Inc.

• Ticker Symbol: CSU.TO
• Sector: Technology
• Market Cap: $50.57 billion
• PE Ratio: 78.47
• Dividend Yield: 0.23%
• 52-week Trading Range: $1.783.98-$2,460.00

Constellation Software Inc. is a Toronto-based technology and software company that was founded by its current President and Chairman, Mark Leonard, in 1995. 

The stock is known on the TSX for its high share price, but Leonard has never discussed a stock split. 

This company acquires smaller tech companies and operates them in what is like a venture capital model. Officially, it is a holding company that has six different divisions that operate hundreds of different subsidiaries for both the private and public sectors.

What Are the Best Dividend-Paying Canadian Stocks?

Due to the nature of Canada’s stock market, many of the country’s largest companies are also high dividend-paying stocks.

Some of the largest sectors on the TSX include financials, energy, and telecommunications. All of which are high cash-flow industries that pay generous dividend yields.

When looking for the best Canadian dividend stocks, investors should first look to see if the annualized dividend yield is sustainable. You can find this by looking at the company’s dividend history and payout ratio, which is a percentage of the net earnings.

The dividend yield is how much percentage of the stock’s price you receive annually. If a stock price is $100 and it pays a quarterly dividend with an annualized yield of 4.0%. You will receive $4.00 per year or $1.00 per share every quarter.

Here are some of the top dividend-paying stocks for Canadian investors:

1. Enbridge (TSE: ENB)
2. Scotiabank (TSE: BNS)
3. Canadian Natural Resources (TSE: CNQ)
4. Fortis (TSE: FTS)
5. TC Energy (TSE: TRP)
6. Royal Bank (TSE: RY)
7. Pembina Pipelines (TSE: PPL)
8. BCE (TSE: BCE)
9. Toronto Dominion (TSE: TD)
10. Bank of Montreal (TSE: BMO)

Best Canadian Stocks To Buy and Hold

Long-term Canadian investors can benefit from implementing a buy-and-hold strategy.

Since many of the largest Canadian companies pay generous dividends, it allows investors to compound their gains over time.

A buy-and-hold strategy also lowers your trading fees and allows for long-term capital growth.

Here are 5 Canadian stocks to buy and hold forever:

1. Royal Bank of Canada (TSE:RY)
2. Brookfield Asset Management (TSE:BAM)
3. Shopify (TSE:SHOP)
4. Toronto Dominion (TSE:TD)
5. Enbridge (TSE:ENB)

Top Undervalued Canadian Stocks

Undervalued stocks are often considered bargain stocks and can provide great long-term returns.

These stocks are often undervalued based on the assumed intrinsic value. This could mean the market is not factoring in future growth into the current stock price.

While these stocks are great deals, you might have to wait a long time to see major returns on your investment.

Here are the 5 of the best undervalued Canadian stocks for 2023:

1. Fortis Inc (TSE: FTS)
2. Shaw Communications (TSE: SJR-B)
3. Cenovus Energy (TSE:CVE)
4. Canada Goose Holdings (TSE: GOOS)
5. Alimentation Couche-Tard (TSE: ATD)

How To Buy Canadian Stocks For Cheap

It is easiest to buy Canadian stocks on discount brokerages to avoid trading fees which can eat into your long-term gains.

Questrade

Established in 1999, Questrade is Canada’s largest discount brokerage and one of the oldest as well.

On Questrade, you can trade stocks for as low as $0.01 per share with a minimum order of $4.95 and a maximum of $9.95 per trade.

Buying ETFs on Questrade is absolutely free, although there is a $4.95 charge for selling your ETFs. This platform also supports bonds, mutual funds, and options trading.

Wealthsimple Trade

Wealthsimple Trade was founded in 2014 and is majority-owned by the Power Corporation of Canada.

This is a popular discount brokerage platform because stocks and ETFs are completely commission-free trading.

It even allows you to buy fractional shares and is one of the only Canadian brokerages to allow this.

Qtrade

Qtrade is a Vancouver-based discount brokerage that offers lower-cost trading fees than the big banks.

Stock trading on QTrade costs $8.75 per trade or $6.95 for Investor Plus if you make more than 150 trades per quarter.

It also offers options trading and free ETF trades for certain funds that are on a specified list.

Conclusion

Picking stocks, especially in a bear market, can be a difficult task for Canadian investors.

Looking at metrics like PE ratio, dividend yield, and revenue growth is a great place to start when evaluating the best Canadian stocks.

Targeting undervalued stocks and high-dividend paying stocks is also a sound long-term investing strategy for Canadian investors.

Remember, none of this is financial advice. These articles are a great place to start your research, but make sure to always do your due diligence before investing in any stock or asset.