3 Top Canadian Stocks to Buy Before Summer

Here are three of my top picks I think investors would be remiss to ignore at these levels today.

| More on:
investment research

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

Summer is on the way, which means that it is the perfect time for investors to make new additions to their portfolio. Spring cleaning is always good, however we often forget to do so with our portfolios.

For those looking to make some portfolio tweaks, here are three companies I’d consider checking out today.

Scotiabank

Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) has been one of my top picks in the banking sector for quite some time, mainly due to its strong international foothold. Indeed, this bank has a lot of exposure to emerging markets, which generally provide higher growth rates than developed markets. For those seeking a Canadian bank with geographical diversification, Scotiabank is a great option.

The company’s grown its international presence via various acquisitions over the years. Scotiabank’s strong position in Mexico, the Caribbean, and various South American countries is enticing for investors.

Currently, Scotiabank provides income investors with a handsome dividend yield of 4.6%.

Restaurant Brands

At the time of writing, Restaurant Brands (TSX:QSR)(NYSE:QSR) offers investors a dividend yield of 3.2%. I mean, 3.2% is nice, but it’s not necessarily something to write home about. That said, I think Restaurant Brands is a great long-term growth pick. The company’s upside is in its growth potential abroad, but it’s stock is being priced as a rather slow-growth option today.

Restaurant Brands has traded sideways of late mainly due to a slowing of growth related to the pandemic. The company’s top and bottom lines took a hit this past year, and investors appear to be concerned about whether or not this company can get back to its previous growth ways.

However, I see tremendous opportunity with Restaurant Brands stock right now. It’s an easy reopening play, based on a reversion of the negative catalysts which have taken this stock lower. However, I also think the company’s high-quality banners provide investors with a degree of safety that’s hard to find today.

Restaurant Brands’ banners include Burger King, Popeyes, Louisiana Kitchen and Tim Hortons. While Tim Horton’s has underperformed, Popeye’s and Burger King have really shone of late. I think over the long-term, another acquisition could be on the horizon. Such a move could provide a much-needed jolt to this stock that’s in need of some sort of catalyst today.

Alimentation Couche-Tard

In addition to Scotiabank and Restaurant Brands, Alimentation Couche-Tard (TSX:ATD.B) has been one of my top picks for some time.

Why?

Well, Couche-Tard has proven itself as a top-notch consolidator of a fragmented industry. Other consolidation plays on the TSX trade at much higher valuation multiples than Couche-Tard. Accordingly, I see an easy value-based thesis for owning this stock (which trades at only 13-times earnings).

Additionally, Couche-Tard will continue to make some strategic moves to shift its focus away from its gas station business. The company’s failed bid for French retailer Carrefour was a step in this direction. Gas station sales are likely to continue to decline as EV adoption picks up. I wouldn’t be surprised to see Couche-Tard dip its toe in this space in the coming months, or pursue another deal for a major retailer.

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. The Motley Fool recommends BANK OF NOVA SCOTIA and RESTAURANT BRANDS INTERNATIONAL INC.

More on Dividend Stocks

Payday ringed on a calendar
Dividend Stocks

Earn $465/Month in Passive Income With These 3 Stocks

Dividend stocks offer hands-off passive income, and if you pick the right stocks, you may also experience a bit of…

Read more »

ETF chart stocks
Dividend Stocks

3 ETFs to Buy Now and Hold for Decades

Holding reliable growth ETFs for decades is one of the most tried and tested ways of building your wealth over…

Read more »

edit Back view of hugging couple standing with real estate agent in front of house for sale
Dividend Stocks

Housing Affordability Is Out of Reach for Many Canadians

The interest rate hikes will cool the real estate market, but the housing affordability crisis would worsen, as homeownership and…

Read more »

Dollar symbol and Canadian flag on keyboard
Dividend Stocks

2 Oversold Great Canadian Dividend Stocks to Buy Now and Own for 20 Years

These top Canadian dividend stocks look oversold right now and continue to raise their payouts.

Read more »

Man holding magnifying glass over a document
Dividend Stocks

3 Value TSX Stocks to Eye in July 2022

Here are a few value TSX stocks to check out in July 2022. They also pay juicy, safe dividend income…

Read more »

analyze data
Dividend Stocks

2 Canadian Stocks at the Top of My Buy List

Here are two of the top Canadian stocks on my buy list, as the market uncertainty continues to plague Canadian…

Read more »

money cash dividends
Dividend Stocks

TFSA Passive Income: 2 Top TSX Dividend Stocks to Buy on the Correction

These top dividend stocks look cheap to buy right now for a TFSA focused on passive income.

Read more »

Target. Stand out from the crowd
Dividend Stocks

2 Oversold TSX Stocks to Buy in July

Invests can now find good value right now in top TSX dividend stocks.

Read more »