Investors seeking growth and income have come to the right place. Indeed, with the economy set to reopen fully, investors will want access to the growth potential of the market. However, dividends also provide a degree of safety during down times.
Accordingly, I think these three stocks should be up for consideration for every long-term investor.
The pandemic hasn’t been friendly to the restaurant sector. Indeed, there’s certainly a case to be made that most quick-service restaurants are due for a recovery.
Such is the case today with Canadian fast-food conglomerate Restaurant Brands International (TSX:QSR)(NYSE:QSR). I think an economic reopening positions this company will for a turnaround. Indeed, Restaurant Brands has been a great growth play in the past. The fact that this company has slowed down somewhat has created pause among some investors. However, when everything is back to normal, I’d expect to see growth pick up for Restaurant Brands, at least to historical levels.
Besides being a reopening play, Restaurant Brands’s outstanding portfolio of brands provides investors with a high-quality moat that’s hard to find. Accordingly, there are few safer growth and income plays on the market to consider today.
Though Alimentation Couche-Tard (TSX:ATD.B) has underperformed in recent years, I think there’s some serious growth potential for this stock on the horizon. Like Restaurant Brands, the pandemic hasn’t played nice with Couche-Tard shareholders. We’re all driving less, filling up our gas tanks less frequently, and stopping by convenience stores less often.
Accordingly, Couche-Tard’s core business has taken a hit of late. That’s to be expected.
However, unlike many other reopening plays, Couche-Tard stock hasn’t bounced back like many of its peers. This is still a stock I view as extremely undervalued in this environment. Accordingly, those seeking growth at a reasonable price can’t go wrong with this stock today.
I think Couche-Tard’s growth-by-acquisition strategy will continue to bode well for long-term investors. Indeed, Couche-Tard took a hit after its failed bid for French retailer Carrefour. But with that overhang off the table for now, I think this stock is set to outperform over the medium to long term.
As far as utilities plays go, Fortis (TSX:FTS)(NYSE:FTS) remains one of my top picks. This dividend gem has one of the best track records of dividend increases on the TSX. In fact, Fortis has done so for nearly five decades.
Thus, the company’s relatively modest dividend yield of 3.7% (which is still pretty great) should be taken in context. Fortis’s income-producing potential over the long term should not be overlooked.
Fortis has been able to raise its dividend for such a long time due to an extremely reliable business model. The company’s core regulated utilities business provides cash flow stability, which is hard to come by in this market. This may be a slower-growth play than the other picks on this list. However, the defensiveness Fortis provides ought to be taken into account when building a diversified portfolio.