When you think about the world of stock market investing, who do you think could be the prime example to follow? To become the best, you might typically try to model your approach based on those who are successfully making it work. When it comes to investing, Warren Buffett is the undisputed champion of investors.
Dubbed the Oracle of Omaha, Warren Buffett is famous for rarely ever owning stocks outside the United States. Over the years, Buffett has dabbled in investments throughout the U.K., Israel, and even China. The undisputed king never invests in companies unless he is sure about the long-term profitability of his portfolio.
When he chooses stocks outside the U.S., you can be sure he saw significant potential in those companies to add them to Berkshire Hathaway’s portfolio. Warren Buffett also happens to own substantial Canadian holdings.
While Buffett does not own a tonne of Canadian stocks, there are a couple of companies he has invested heavily in: Suncor Energy (TSX:SU)(NYSE:SU) and Restaurant Brands International (TSX:QSR)(NYSE:QSR).
I will discuss both the stocks, so you can consider the assets for your portfolio if you have any additional cash put aside.
Suncor is among the most prominent energy companies in Canada. As of the filing on May 15, 2020, Buffett owns $255 million worth of Suncor shares. That is a 1% share of the massive oil producer.
The last 12 months have not been the best for Suncor. The integrated energy company has struggled along with the rest of Canada’s energy sector. Initially, the troubles were due to oil price wars between Russia and Saudi Arabia. The COVID-19 pandemic struck to make matters worse.
The stock plummeted by almost 70% between January and mid-March 2020. The drastic decline was horrifying for investors. A disappointing first quarter in which it lost $309 million and slashed its dividend by 55% further shook investor trust. The short-term outlook for the stock looks bleak, but it could be a worthwhile investment in the long run, since Buffett hasn’t seemed to change his holdings in Suncor Energy.
Restaurant Brands International
Restaurant Brands International is another Canadian stock that the Oracle of Omaha owns. The fast-food conglomerate has some heavy hitters under its belt. The company was formed with the merger between Tim Hortons and Burger King. It added Popeyes Louisiana Kitchen to its acquisitions, and it became a significant asset to QSR.
Buffett owns 1.6% of Restaurant Brands International, or $447 million worth of shares. In the latest quarter, most stocks did not perform well. Surprisingly, QSR managed to produce decent results. The sales did not see massive growth, but they did not witness a drastic decline. The net income was slightly lower, and that was the only disappointing factor.
The sales for Popeyes grew by 32%, making it a better-than-expected quarter for the restaurant amid the pandemic. The growth in sales was particularly heartening for QSR investors. A feature of the economic shutdown caused to curb the spread of COVID-19 is the closure of restaurants.
The closure has devastated most restaurant chains. Fast-food restaurants can still deliver, but it has hurt business. QSR’s earnings declined in the quarter, but the percentage decrease was smaller than expected. It is a sign that the company is performing far better, despite the headwinds from the global health crisis.
If you have an extra $1,000 lying around and want to invest in one of the two companies, I would suggest investing in QSR for short-term benefits. Suncor does not seem like it can do well in the near future, but it is an overall robust stock with a healthy long-term future.
I think that both QSR and Suncor are top-quality stocks that can be excellent additions to your investment portfolio.
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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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares). The Motley Fool recommends RESTAURANT BRANDS INTERNATIONAL INC 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 June 2020 $205 calls on Berkshire Hathaway (B shares).