Steady increase. Stable dividends.
These are the two things you want to look for when choosing long-term, buy and hold stocks.
If you find these things by looking at analysts’ recommendations, historical performance, and the company’s financials, you can pretty much rest assured that you have a good choice over the next few years. This makes these stocks the perfect choice for your RRSP or TFSA.
Three such stocks I would recommend at this moment are Restaurant Brands International Inc. (TSX:QSR)(NYSE:QSR), Emera Incorporated (TSX:EMA), and Thomson Reuters Corporation (TSX:TRI)(NYSE:TRI). All three have a history of steady growth, both in share price and in dividend yield.
The world’s third-largest global quick-service restaurant chain is set up for a stellar future. Currently, the company has three major brands to its name: Tim Hortons, Burger King, and Popeyes, and is setting itself up for some major growth. It has taken these brands to an international level, and the possibility for further acquisitions of other restaurant chains is definitely on this company’s radar.
In the short term, Restaurant Brands has focused on brand awareness, guest experience, and an increased use of technology across its brands for a customer-first approach. This focus seems to be working, which is reflected in the company’s balance sheet.
Its 2018 earnings report showed sales growth of 7.4%, earnings per share growth of 25%, and an increased EBITDA of 4.1%. That growth is being used to pay off its $16 billion debt, and for its dividend of 3.21% at the time of writing.
Emera, another big one, is one of Canada’s largest utility companies, making it a pretty safe stock ahead of a potential recession. But that doesn’t make this stock totally boring, as Emera has a number of growth opportunities it is beginning to explore.
For example, the company has transitioned from a mostly Canadian utility to one that gets most of its earnings from U.S. subsidiaries, which has provided a boost to its share of earnings from businesses.
Beyond 2020, management is looking at solar as its next investment in Florida, selling 20-30% of assets for the $6 billion project over the next three years. This realignment should see some high growth for investors, which would mean more growth to the company’s dividend of currently 4.7%.
Thomson Reuters has had a bump since January in part thanks to both the market rise that happened at the beginning of the year and its quarterly and year-end earnings report. The company saw 4% growth in revenue for the year and expects to double that for 2019.
This growth will likely come after the company sheds 55% of its financial and risk business, making for a better balance sheet and allowing it to focus on legal databases and accounting software, which needs far less ongoing investment. In the future, Thomson Reuters will consist of three parts: legal, tax and accounting, and news.
As for its shares, there is speculation that the company could soon purchase up to 30% of its outstanding shares, which would be great news for investors. In the meantime, those investors are getting a great dividend of 2.43% at the time of writing.
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Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool owns shares of RESTAURANT BRANDS INTERNATIONAL INC and has the following options: short October 2019 $82 calls on Restaurant Brands International.