Canada hasn’t been the best country to invest in. Since 2006, the S&P/TSX Composite Index has generated a return of 42%. Over the same period, the S&P 500 Index, which covers U.S. companies, generated a return of 130%.
But indexes don’t capture everything. Consider Shopify. This Canadian company has seen its shares rise by more than 1,000% in fewer than five years.
Canada is still a country capable of generating incredible returns. Recently, a few of these promising stocks have gone on sale. If you want to retire rich, this could be a rare opportunity to scoop up Canadian icons at a discount.
Invest with the best
Fairfax Financial Holdings is one of the best-performing stocks in Canadian history. Since 1985, it’s produced annual returns of around 17%. If you had invested $10,000, it would have become nearly $2.5 million.
Fairfax runs a model very similar to Warren Buffett’s Berkshire Hathaway. Namely, it owns a portfolio of insurance businesses that generate regular cash that is then used for general investing purposes. Prem Watsa, the founder and CEO, is in charge of directing these investments.
In many ways, Fairfax is better positioned than Berkshire. Berkshire has a $600 billion market cap, while Fairfax is valued at just $17 billion, giving it many more decades of growth. Watsa is also 69 years old, significantly younger than the 89-year-old Buffett.
If you want to invest in Canada’s Berkshire Hathaway, this is your chance.
Bet on Canada
There isn’t a more Canadian company than Canadian Utilities. It’s been delivering power throughout the country for more than 40 years.
At its core, Canadian Utilities is a traditional utility. Roughly 86% of its earnings are regulated, meaning the government guarantees how much it’s able to charge customers for electricity and natural gas. The other 14% of earnings stem from long-term contracts, so in total, the company boasts one of the most stable profit streams on the market.
Demonstrating its low volatility is Canadian Utilities’s 47-year stretch of consecutive dividend increases — the longest record of any TSX stock. With a 4.3% yield and a multi-decade history of generating double-digit returns, this is a proven winner with a bulletproof business model that should continue to grow over the next decade and beyond.
Future-proof your portfolio
From 2002 to 2007, BlackBerry stock rose more than 30 times in value. Since that peak, however, shares have given up all of the gains. But over the next several years, the stock could stage a huge comeback.
During the last run, BlackBerry profited from its smartphone-manufacturing business. These days, the company doesn’t even make smartphones. Now, it’s focused on next-gen opportunities like autonomous driving and big data, leveraging its security expertise to gain an early lead.
The market still treats this like a phone company, but today, its sales are completely dominated by software and services — revenue streams that are higher margin and much stickier. There’s execution risk here, but if you want to future-proof your portfolio and expose yourself to major gains, BlackBerry should be at the top of your list.
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Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares), BlackBerry, Shopify, and Shopify. The Motley Fool recommends BlackBerry and FAIRFAX FINANCIAL HOLDINGS LTD and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), and short January 2020 $220 calls on Berkshire Hathaway (B shares). Fool contributor Ryan Vanzo has no position in any stocks mentioned.