Long-term investors looking to make some portfolio tweaks have come to the right place.
The TSX happens to be filled with a number of great opportunities for long-term investors. However, some stocks are better than others. In this article, I’m going to highlight two of my top picks right now for such investors.
Yes, BlackBerry stock isn’t trending in the right direction. Indeed, the company’s recent dismal earnings don’t paint the best picture of this company’s potential right now.
However, for investors willing to look past these near-term headwinds toward the long term, now could be the perfect time to pick up shares of this company.
The Waterloo-based tech company happens to have quite a few growth catalysts that are in its favour today.
One of them is the company’s transformative deal with Amazon.
These two tech companies are collaborating to develop BlackBerry IVY, a cloud-based software platform with some pretty great growth potential across a number of key growth segments. BlackBerry and Amazon hope this collaboration will result in some market share leadership in key markets, such as connected cars. Indeed, the growing popularity of BlackBerry IVY and its other software platforms indicates this isn’t that far-fetched of a concept.
Accordingly, I think there’s a tremendous amount of optimism that should be priced in with this stock today. It’s trading at much lower valuation multiples than its peers, and still has overly pessimistic sentiment built into its stock price. If and when those headwinds are removed, BlackBerry stock could really take off.
Killam Apartment REIT
For long-term investors seeking dividend income and long-term total return, Killam Apartment REIT (TSX:KMP.UN) is an excellent option in the real estate space.
Based on Killam’s name, one can easily determine that this company is a residential REIT. That’s important, because I think REITs are likely to move in disparate directions over the medium term, depending on which sub-sector they operate in.
For residential REITs, I think the outlook is better than for most other real estate assets classes. And Killam’s selling point is the fact that this company has a high-quality portfolio of assets producing stable and growing revenues for investors.
The company focuses on apartments and condos, concentrated in the Atlantic provinces. This stock has been on my watch list for quite a few years when it comes to the real estate sector. This company’s management team has been extremely efficient in building a strong portfolio, which includes assets worth $3.8 billion. Killam aims to grow its portfolio of high-quality assets by making new acquisitions and developing new properties.
At the time of writing, this stock has a valuation multiple of 13.5 times its earnings. Furthermore, it trades at around 18 times free cash flow per unit. Between 2015 and 2019, Killam Apartment has managed to grow its operating income at a yearly rate of over 9%. Additionally, this company has increased its total assets by a solid 12.5%.
I have no doubt that there’s plenty of upside for the company over the long term. Hence, it remains one of my top picks under $25 for investors today.
Like these top TSX 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.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Fool contributor Chris MacDonald has no position in any of the stocks mentioned. David Gardner owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon. The Motley Fool recommends BlackBerry and BlackBerry and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon.