Before You Buy Nuvei: Here’s a Blue-Chip Stock I’d Buy First

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Nuvei was once one of the most popular stocks on the TSX. In fact, this company came into the public markets with so much hype that it set a new record for the largest tech initial public offering in Canadian history. Upon its listing on the TSX, Nuvei stock would go on to skyrocket in value. It gained about 275% in its first year of trading.

The issue with Nuvei

However, things started to take a turn for the worse in late 2021. A short report put out by Spruce Point Capital Management sent shares tumbling. In the report, Spruce Point mentioned that the company had covered up business failures and suggested that major individuals within Nuvei were tied to fraudulent activities. Despite institutional investors and the company responding by saying those allegations weren’t based on fact, Nuvei stock continued to struggle.

Those struggles would go on through 2022, as the tech sector would face major hurdles as a result of the weak global economy. Now, with many growth stocks starting to rebound, investors are starting to look at Nuvei again as a possible rebound opportunity.

If you haven’t taken a look at Nuvei before, know that it operates in the digital payments space. That’s an industry that is sure to grow over the next decade. With major customers already signed up to use Nuvei’s platform, it seems as though this company could be a major player over the coming years.

However, I’m not so convinced that Nuvei could be the next big stock that investors are hoping it could be. There are competitors in this space that have already established themselves as global behemoths. For example, Nuvei would still have to compete with the likes of PayPal. Instead, I would turn to a blue-chip stock that could help your portfolio in the meantime, at least until Nuvei appears to get back on its feet.

What stock would I buy first?

If you’re interested in adding exposure to the financial sector, then I would suggest buying shares of Bank of Nova Scotia (TSX:BNS). Although this company doesn’t operate as a tech company, like Nuvei, it does deal with financial transactions. Bank of Nova Scotia is one of the largest banks in Canada, with thousands of branches across the world.

Bank of Nova Scotia could also offer a bit of growth potential to investors as well. This company is well situated to become a major player in the Pacific Alliance. That’s a region that includes the countries of Chile, Columbia, Mexico, and Peru. It’s estimated that the economies in those countries could grow at a much faster rate than the Canadian and American economies over the next few years. If so, then Bank of Nova Scotia could leverage that into major growth.

In addition, Bank of Nova Scotia is a prolific dividend payer. The company has been paying shareholders a portion of its earnings in each of the past 190 years. If you aspire to create a solid source of passive income over the coming years, then investing in Bank of Nova Scotia could be a great way to start.

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Fool contributor Jed Lloren has positions in Bank Of Nova Scotia. The Motley Fool has positions in and recommends Nuvei. The Motley Fool recommends Bank Of Nova Scotia and PayPal. The Motley Fool has a disclosure policy.