If you have a low tolerance for risk but still want to invest in income-producing assets, the option is to invest in companies whose businesses are less prone to volatility. The stocks for you are Restaurant Brands (TSX:QSR)(NYSE:QSR), Telus (TSX:T)(NYSE:TU), and Pembina (TSX:PPL)(NYSE:PBA).
The three named companies are not the hottest stocks on the TSX nor the highest dividend-payers. But you would be investing in safer, low-risk Canadian stocks.
Canadian fast-food brands3 Stocks for Canadians With Low-Risk Investing Appetites
Restaurant Brands is the owner of Tim Hortons, Burger King and Popeyes’ Louisiana Kitchen, which are three famous fast-food brands in Canada and around the world. This $23.2 billion fast-food chain operator boasts of a $30 billion in system-wide sales.
About 24,000 restaurants are operating in more than 100 countries and selected U.S. territories. Burger King contributes the most to the business, with sales accounting for 67% of total revenues. Popeyes contributes the least but is fast growing.
The stock pays a 2.91% dividend, which is respectable and sustainable. In terms of performance, QSR’s gain year-to-date is 29.8%. Market analysts are estimating EPS and sales growth of 10% and 5% in 2019, although it’s lower compared with the figures from 2018.
One point worth mentioning is that Restaurant Brands is only one of two Canadian stocks in the portfolio of billionaire and value investor Warren Buffett.
Telus is a must-have stock if you’re seeking safety and protection of investment. This $28.6 billion telecom provider is a significant player in an industry that’s often been the subject of criticism for being a monopoly. But the fact remains that Telus is a profitable company, and will continue to make more money for years to come.
The stock is well suited to your low-risk appetite as it’s also recession-proof. Hence, market fluctuations aren’t a significant concern. You’ll benefit from the 4.7% dividend with the assurance of payments in a rising or declining market.
Analysts see a favourable long-term trend, although the growth would be in single digits as it has been over the past 10 years. As of mid-October, the stock is up 8.98%, which is consistent with growth estimates. You won’t have a sleepless night by parking your money in a premium stock that’s seldom at risk.
Irrepressible energy stock
Pembina is a reliable dividend-payer and a favorite of many retirees. While the energy sector will witness weakness from time to time, this $24 billion oil and gas midstream company has gallantly endured down markets in the past.
The company is responsible for moving natural gas and other petro products in Canada, and the U.S. Pembina has nearly 10,000 kilometres of pipeline across British Columbia and Alberta.
Despite the turbulence in the energy sector in 2019, Pembina is doing remarkably well, with the stock gaining 20% as of this writing. The stock pays a dividend of 5%, and by reinvesting the dividends, the overall return on your investment could increase further.
Analysts maintain their buy ratings and see more upsides soon. Based on projections, Pembina could climb by roughly 32% in the coming months, barring any significant disturbances.
Low risk all the way
If low volatility and high dependability are your measures of low-risk investments, Restaurant Brands, Telus, and Pembina are the logical choices. These stocks are for people with a low tolerance for risk.
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 Christopher Liew has no position in any of the stocks mentioned. Pembina Pipeline is a recommendation of Dividend Investor Canada.