Unless you’re a seasoned disciple of Warren Buffett, it’s hard not to be somewhat enticed by the astronomical returns that have been put up by many of Canada’s high-flying pot stocks. They’ve made many folks rich over a very short period, and while the marijuana market may be one of the greatest generational opportunities in the recent memory, the fact remains that they’re far too risky to own for a majority of investors.
So, don’t feel obliged to leave your circle of competence and give into the fear of missing out (FOMO) just because the talking heads on CNBC or BNN Bloomberg are talking about the subject ad nauseum. There are other multi-bagger opportunities out there that can offer you a superior risk-adjusted return throughout the long-term without requiring you to risk your entire principal on the occurrence of short-term contingent events.
So if you’re sick of hearing about hyped-up cannabis stocks, and would rather focus on investing in a name that’ll help you build wealth safely over the next 5, 10 or 20 years, you may want to consider the following two stocks instead.
The Goose is not only the hottest IPO to hit the Canadian market in decades; it’s arguably the apparel stock with the highest upside over the next five to 10 years! The incredibly intelligent management led by Dani Reiss continues to pull all the right levers to grow the business by high double-digit percentage points in a profoundly profitable fashion.
Who says you need to compromise on near-term profitability to attain massive top-line growth?
As Canada Goose continues with its global expansion while beefing up its DTC e-commerce channel, I think the company has many more upside surprises up its sleeve. The company has exceeded the expectations of analysts in the past, and with strong growth drivers up ahead, Canada Goose could be Canada’s next big multi-bagger.
When it comes to high-growth stocks, you’re expected to take on a lot more risk relative to a lower-growth stalwart. Restaurant Brands is a rare exception with its highly predictable long-term growth plan that could realistically sustain double-digit EPS growth numbers for many years, possibly decades to come.
Premier fast-food restaurants are recession resilient cash cows. The more establishments you plop down, the more wealth goes back into the pockets of shareholders. The masterminds behind the company, 3G Capital, are seasoned operators who, like Canada Goose, know how to grow top-line numbers through the roof while maintaining incredibly high profitability numbers.
The brands behind Restaurant Brands (Tim Hortons, Burger King, Popeyes Louisiana Kitchen) have tons of untapped potential in the international markets with the potential draw massive crowds. Through the company’s master franchise joint venture, Restaurant Brands can attain maximum growth with minimal capital risk.
As cannabis investors see their holdings boom and bust over the course of many years, you’re going to be laughing your way to the bank with generous dividend payments to go with substantial capital gains as the managers at 3G Capital continue to execute on a plan to slowly, but surely take over the fast food industry one acquisition at a time.
Cannabis stocks may have explosive upside potential in the near-term, but over the next seven years plus, I’m willing to bet Canada Goose and Restaurant Brands will grant you a far greater total return if you were to place a bet at today’s levels.
The choice is yours. Speculative near-term upside potential for an astronomical amount of risk? Or consistent long-term upside with minimal risk for those with a long-term time horizon? For most Foolish investors, the answer is clear!
Stay hungry. Stay Foolish.