March is a big month. We’re approaching RRSP and TFSA season, and the pressure is on to find the best opportunities right now. However, investors vary in what they’re looking for.
Good news: I’ve got three picks cover the spectrum for all investor types.
Growth: Constellation Software
Constellation Software has become one of the best acquirers on the TSX. Constellation’s growth-by-acquisitions business model has allowed investors to benefit from the impressive compounding the company’s management team has provided over the years. Indeed, a fragmented software industry in North America means many a long runway for growth.
I think Constellation is well positioned to continue its historical outperformance in acquiring great companies at good prices. Accordingly, I think growth investors should certainly consider this company, particularly in a TFSA vehicle.
Defensiveness and value: Kirkland Lake Gold
Do you value capital preservation over everything else? Are you worried about a market correction or even a crash?
Kirkland Lake is a mid-cap gold producer with operations in Canada and Australia presently. These are geographically safe locations and are mining-friendly jurisdictions as well.
Indeed, I think Kirkland Lake is one of the cheapest gold miners on the TSX today. Currently, Kirkland Lake carries a valuation of only 11 times earnings. The company has essentially no debt, about $850 million in cash, and a market cap of only $11 billion. Fundamentally, this is one of the best gold miners out there today.
I think this value combined with the defensiveness gold provides makes Kirkland Lake a real contender for most investors as a core portfolio holding.
Nearing retirement and want some steady income? How about income that grows over time and long-term total returns that (should) be in the double-digit range?
This energy infrastructure (pipeline) player is an income-generating machine. The company’s dividend yield of 7.6% is extremely attractive. Some might say it’s too attractive. Indeed, any company with a dividend yield in the high single digits ought to be investigated further. However, I think Enbridge’s defensive business model and stable cash flows ensure the safety of this yield long term.
Furthermore, Enbridge has proven to be a consistent dividend grower over time. Indeed, the company’s been pretty consistently hiking its dividend over time. Yes, this pace has slowed of late. However, I think the fact that Enbridge has diverted more capital away from dividend distributions to paying down debt and improving the company’s balance sheet is a good thing for investors.
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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 Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Constellation Software.