The global economy is inching toward a recovery. Vaccine rollouts are picking up steam, and some pandemic-related restrictions are already being lifted. Accordingly, there’s some well-deserved anticipation that stocks could go on a nice run in 2021.
For those looking to take advantage of this scenario, here are three top picks to consider. These companies all have excellent leverage to the reopening thesis underpinning the stock market today. However, these are also great long-term holdings I’d recommend investors consider at any time.
Canada’s largest bank, Royal Bank of Canada (TSX:RY)(NYSE:RY), provides a margin of safety its peers just can’t. Additionally, the fact that Royal Bank continues to yield more than 3.6% is an attractive proposition today, given where bond yields are.
Indeed, this bank has proven its stability in times of crisis in the past. The bank’s balance sheet remains strong, and this bank continues to be a strong defensive play for investors.
This has been supplemented by very strong earnings this past quarter. The bank managed to increase its overall profit by 10%, exceeding analyst predictions handily.
Royal Bank isn’t the cheapest big bank, but it’s expensive for a reason. Investors get quality with this name.
A long-term growth play that has slowed down of late is Alimentation Couche-Tard (TSX:ATD.B). This company continues to be one of the largest global players in the gas station and convenience store domain. It has gained this size through years of acquisitions, growing to a market cap of more than $40 billion today.
Though this retail play was hit hard with pandemic-related chaos, there is hope for this stock with the economy on its track of recovery. Gasoline demand remains depressed and will likely to be low for some time. However, as more cars hit the road, analysts expect Couche-Tard’s earnings to improve substantially over the medium term.
I also think that the company could continue to pursue acquisitions that would positively transform its structure over time. The recent failed bid for Couche-Tard is one I view positively in this light.
WPT Industrial REIT
As far as real estate investment trusts (REITs) go, industrial REITs are where it’s at today.
Industrial real estate provides the backbone of the logistics and warehousing infrastructure supporting the e-commerce boom. It’s a recession-resistant real estate class with tonnes of long-term growth upside.
Indeed, in this space, WPT Industrial REIT is one of my top picks. This REIT holds a portfolio of the highest-quality assets located close to city centres in North America.
Accordingly, for those bullish on the pandemic-related recovery, this is a top pick today.
Like these top picks? Here are a few more to consider right now:
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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 ALIMENTATION COUCHE-TARD INC.