3 Great Investments We Pass Every Day

Companies such as Leon’s Furniture Ltd. (TSX:LNF) and Recipe Unlimited Corporation (TSX:RECP) provide intriguing ways for investors to diversify with great everyday stocks full of opportunity.

| More on:

Get started today reminder note

One thing that continues to amaze me is the discovery of companies that we interact with or pass every day of our lives that go seemingly unnoticed as investment options. In fact, I’ve caught myself on occasion passing by a business that was bursting with customers, thinking what a great business it was without realizing that the company was, in fact, trading on the market, where it is an incredible retail stock worthy of owning.

Keeping that same notion of discoverability, here are a few promising investments that many of us pass by almost daily.

Investing in a furniture store may not seem like the most profitable of ventures at first, but Leon’s Furniture Ltd. (TSX:LNF) offers a compelling case for long-term investors that are looking for an investment that can offer both growth and income.

In addition to the furniture the company is most known for, Toronto-based Leon’s sells appliances and home electronics.

In terms of results, in the most recent quarter, Leon’s generated $601.1 million in sales, registering a 4.7% improvement over the $573.9 million reported in the same quarter last year. Adjusted net income for the quarter saw an impressive 35.1% increase over the same quarter last year, coming in at $500.7 million.

Much of that impressive growth, which included record-breaking revenue figures, was attributed to efforts to rein in costs and drive up traffic to stores, and management announced in the last quarter that those efforts will continue throughout the next 12-month period.

In addition to the impressive financials, Leon’s offers investors a very respectable quarterly dividend which pays a 2.67% yield.

Leon’s currently trades at just over $18 with a P/E of 14.34.

Another everyday favourite worthy of mention is Pizza Pizza Royalty Corp. (TSX:PZA) — the name behind both the Pizza Pizza and Pizza 73 franchises, which, collectively, have over 750 locations around the country.

Results for the first fiscal quarter of 2018 showed modest sale gains across both chains of 1.1% over the same quarter last year, coming in at $135.3 million.

Investors contemplating an investment in Pizza Pizza should also consider the company’s penetration in the overall pizza market. While Pizza Pizza is one of the largest, if not the largest, pizza chains in the country, the company is still concentrated around just a few provinces — specifically, Ontario and Quebec for Pizza Pizza and Alberta and British Columbia for Pizza 73.

Pizza Pizza offers investors a very appetizing monthly dividend which pays an incredible 7.01% yield, which represents a high payout level for the company. Additionally, prospective investors should take note that the company has hiked that already impressive dividend on occasion over the past few years, but that growth still pales to the growth of some of the more aggressive income stocks on the market.

Pizza Pizza currently trades at $12.15 with a P/E of 13.98.

If in-restaurant dining is more to your liking, another option to consider is Recipe Unlimited Corporation (TSX:RECP). Recipe is the new name for what used to be known as Cara Operations. The recent name change was done to bring focus to the company’s current portfolio of restaurant brands, which is its core business and part of its heritage as the oldest and largest full-service restaurant company in the country, moving away from its former business of providing catering services to airlines and other businesses.

In terms of a brand portfolio, Recipe includes a number of well-known Canadian restaurants, including Harvey’s, Swiss Chalet, Milestone’s, Montana’s, Kelsey’s, and Bier Markt. Recipe’s unique mix of restaurants provides an intriguing opportunity for diversification and a hedge against going all-in on any one type of restaurant company.

While Recipe does offer investors a dividend, the lower 1.54% yield should hardly be the primary reason to consider an investment in the company. Instead, prospective investors should look at the rich brand portfolio that is well diversified to cater to the different tastes and price points of consumers.

Recipe currently trades at just below $27 with a P/E of 19.16.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Demetris Afxentiou has no position in any stocks mentioned.  

More on Investing

grow dividends
Investing

Here’s My Top 3 TSX Stocks to Buy Right Now

Even though the TSX has been rising, there are still some good bargains out there. Here are three top compounding…

Read more »

Target. Stand out from the crowd
Investing

Prediction: This Canadian Growth Stock Could Double by 2030

Alimentation Couche-Tard (TSX:ATD) is a top growth stock that could do well over the next six or so years.

Read more »

Businessman holding AI cloud
Tech Stocks

Could Investing $20,000 in Nvidia Make You a Millionaire?

Nvidia stock has made investors millionaires in the last 10 years. Is it too late to invest to become a…

Read more »

Engineers walk through a facility.
Dividend Stocks

1 TSX Stock I Wouldn’t Touch With a 10-Foot Pole

AtkinsRéalis (TSX:ATRL) is one TSX stock I'd never invest in.

Read more »

money cash dividends
Stocks for Beginners

Have $500? 3 Absurdly Cheap Stocks Long-Term Investors Should Buy Right Now

If you're looking for cheap stocks, these three have a huge future ahead of them, all while costing far less…

Read more »

edit Woman in skates works on laptop
Dividend Stocks

3 No-Brainer Stocks to Buy Under $30

These three stocks all offer a huge deal for investors looking for dividends, as well as growth that will last.

Read more »

Business man on stock market financial trade indicator background.
Tech Stocks

1 Growth Stock Down 50 Percent to Buy Right Now

There are plenty of growth stocks in the market worth considering, but Shopify (TSX:SHOP) looks like one of the best…

Read more »

You Should Know This
Dividend Stocks

How to Convert a $300 Monthly Investment Into $338 in Monthly Income

If you want a certain amount in monthly passive income, invest a similar amount today and leave the rest to…

Read more »