For investors who are looking to mimic one of the most successful investors of all time, I’ve got two picks to consider today.
Warren Buffett has been bullish on Canada in the past. In fact, the Oracle of Omaha recently purchased a significant stake in Canadian energy producer Suncor Energy (TSX:SU)(NYSE:SU). The fact that he continues to hold Suncor in his portfolio speaks to its value. Indeed, I believe Suncor remains one of the best energy plays in the market as of today.
Besides this stock, Buffett also invested in Restaurant Brands International (TSX:QSR)(NYSE:QSR) stock in the past. Although he doesn’t hold it anymore, the fact that he invested in QSR is a testament to the value of this Canadian long-term play.
Here’s more on why I like these top two stocks right now.
The Calgary-based oil producer has done a good job of creating efficiencies in recent years. The company has done a great job of cutting down operating expenses amid rising oil prices. This has obviously been a winning combination.
Indeed, the company is generating a significant amount of cash flow right now. Accordingly, there’s a very wide margin of safety with this stock right now. Why? Well, the company’s breakeven cost per barrel of crude oil is roughly $35 WTI.
I believe that it’s essential for investors who are optimistic about a recovery in energy to consider the fundamentals of any company before investing. Looking at Suncor’s numbers, the future is bright. The company’s dividend yield of 3.2% further adds to this thesis today.
Accordingly, I’m convinced Suncor Energy is an excellent option for long-term investors right now.
According to the Oracle of Omaha, it’s imperative for his investments to have the widest possible “moat.” This moat he speaks of is really the durable competitive advantage that a company has over its peers. It is intangible, but plays a vital role in how he values companies.
So, what is a moat? Well, brand loyalty creating customer retention is a key factor. Indeed, this is one of the best things about Restaurant Brands.
Restaurant Brands’s core banners include iconic chains such as Burger King, Tim Hortons, and Popeyes Louisiana Kitchen. These wonderful businesses are ones that have created strong brand loyalty among their clientele base. Yes, there’s a lot of competition in the quick-service restaurant space. However, this company has shown its ability to continue to expand globally while retaining a strong reputation.
Indeed, for many long-term investors like Buffett, reputation is everything.
On the fundamentals side, Restaurant Brands isn’t cheap by any means. Indeed, its valuation is high compared to most of QSR’s peers. However, Buffett has often said that he’d prefer to hold an excellent company at a good price rather than vice versa. It appears that this might be the primary reason why Buffett booked profits on this stock last year.
Nevertheless, this stock remains a gem for investors who are willing to pay the price to add quality growth to their portfolios today.