THE TOP CANADIAN STOCKS I’D BUY WITH A $4,000 WINDFALL
When youâve got $4,000 ready to invest, it can feel like a small amount in the world of stocks, but if you choose the right companies, that initial capital can build real long-term wealth. The key is to focus on businesses with strong earnings, proven growth, and the ability to pay dividends through all market conditions. Three standout Canadian stocks that meet these criteria are Loblaw Companies (TSX:L), Cenovus Energy (TSX:CVE), and Leonâs Furniture (TSX:LNF). Each operates in a different sector, helping you diversify even with a modest starting sum.
Loblaw
Loblaw is a staple in Canadian households. As the countryâs largest food and pharmacy retailer, it owns banners like Loblaws, No Frills, Shoppers Drug Mart, and Real Canadian Superstore. This kind of brand recognition and necessity-based business gives Loblaw a built-in buffer against economic shocks.
In its first-quarter 2025 results, Loblaw reported revenue of $13.6 billion, up 4.2% from the year before. Net earnings came in at $418 million, or $1.28 per diluted share, with growth driven by increased food and pharmacy sales. Importantly, Loblaw raised its quarterly dividend to $0.49 per share, marking its 13th consecutive annual increase. That shows both confidence and a strong cash position. With a modest yield and consistent dividend hikes, Loblaw is more about stability and long-term compounding than high payouts.
Cenovus
Then thereâs Cenovus Energy. While energy stocks can be volatile, Cenovus offers exposure to a sector thatâs expected to remain in demand for decades, especially as oil demand stays resilient and global supply remains constrained. In Q1 2025, Cenovus posted net earnings of $859 million, or $0.47 per share, well above expectations. Production climbed to nearly 819,000 barrels of oil equivalent per day, helped by improved refinery throughput in both Canada and the U.S.
With its integration of upstream and downstream assets, Cenovus has greater control over its costs and margins. The Trans Mountain pipeline expansion also came online in 2024, increasing access to international markets and improving Canadian crude pricing. Cenovus currently pays a quarterly dividend of $0.18 per share, with plenty of room for growth as debt comes down and free cash flow expands. This is a name for investors who want value, upside, and a reasonable dividend.
Leon’s
Rounding out this trio is Leonâs Furniture. This is a Canadian stock that doesnât get much attention but has quietly become a dividend machine. Leonâs is the largest furniture and appliance retailer in Canada and owns brands like The Brick and Appliance Canada. The company reported Q4 2024 revenue of $598 million, with net income of $35 million, or $0.45 per share. That was a solid result, considering the slowdown in consumer spending.
What makes Leonâs appealing is its balance sheet. It has relatively low debt and a long track record of profitability. The Canadian stock also continues to pay a quarterly dividend of $0.16 per share. For investors looking for steady income with room for capital appreciation, this furniture giant fits the bill. Its expanding e-commerce platform and strategic real estate holdings offer a hidden layer of value many overlook.
Foolish takeaway
Putting your $4,000 to work here could mean allocating about $1,333 to each Canadian stock. That gives you a nice balance between consumer staples, energy, and discretionary retail. Loblaw gives you peace of mind. Cenovus offers upside if oil prices remain elevated. Leonâs delivers income and quiet growth. More importantly, it sets a strong foundation to build on.
The post The Top Canadian Stocks I’d Buy With a $4,000 Windfall appeared first on The Motley Fool Canada.
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Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Leon’s Furniture. The Motley Fool has a disclosure policy.
2025-05-22T00:55:56Z
