Warren Buffett may be the most famous investor ever and with a track record like his, it’s no question why. He has turned his company, Berkshire Hathaway, into one of the biggest conglomerates in the world and a must-have investment for any investor with a long-term investment strategy.
For Canadian investors, there are two stocks in Canada that you can buy that are similar to Berkshire Hathaway.
Both stocks are run by investors who have been called the “Canadian Warren Buffett,” and both stocks are some of the best companies you can own for the long term.
What’s great about these companies is that you know your capital is being protected, and some of the best and smartest investors in the world are using your money to find some of the top investments globally.
The two Canadian Berkshire Hathaway-type stocks that you can buy today and hold forever are Fairfax Financial Holdings Ltd (TSX: FFH) and Brookfield Asset Management Inc (TSX:BAM.A)(NYSE: BAM).
Fairfax Financial
Fairfax is a Canadian holding company that is structured in a similar way to Buffett’s Berkshire Hathaway. It owns insurance companies, and uses the float it receives from them to invest in other companies and grow the net asset value of the shares.
The company is run by Prem Watsa, one of the best Canadian investors ever.
Watsa’s brilliance became widely known back in the great recession when he outperformed the market considerably, which gained him and Fairfax a tonne of attention and respect.
Now, as we are on the cusp of another possible recession, there is no better person that you can trust to protect your capital that Watsa and his team.
Today, Fairfax trades at just a 16 times price-to-earnings ratio, pays out a dividend that yields approximately 2.25%, and has a payout ratio of just 34%.
Its stock trades at book value which makes it very cheap and gives investors a chance today to buy into this wonderful company today without paying a premium.
Brookfield Asset Management
Brookfield has been one of the top stocks in Canada over the last decade thanks in large part to its CEO Bruce Flatt.
Flatt has also been referred to as the Canadian Warren Buffett and when you consider the history of Brookfield Asset Management, it’s easy to see why.
The company is widely known to be a high-quality investment company, making some of the best deals over the years.
What really drives Brookfield’s growth is that on top of the solid investments it makes, the company also works to improve the operations of its new acquisitions and drive additional profitability, which help to make its investment even that much stronger.
Brookfield has managed to do this time and time again, and now considers its own ability to improve earnings of a potential investment as one of the top factors in whether or not to make the investment.
As a prudent investor it also holds a large quantity of cash to put to use when high-quality opportunities arise.
All in all, this structure and strategy has been highly rewarding for Brookfield, and the growth in its stock, up 450% over the last decade, shows exactly what the company is capable of.
Bottom line
Both these top Canadian stocks are perfect for long-term investors to buy and hold forever. Just like with Berkshire Hathaway, they will continue to build wealth at one of the highest return rates available in the markets, and they can do it without taking on too much risk.
