The pandemic has provided a tremendous amount of volatility in stocks markets over the past year. Indeed, specific stocks have whipsawed in an incredible fashion in a relatively short amount of time.
That said, some companies have held their own better than others. And in this rather overvalued market, investors may be more attuned to picking the biggest and best stocks right now.
In this context, these two picks are among the best stocks in Canada right now — at least, for long-term investors.
Accordingly, let’s take a look!
This fast-food purveyor hasn’t quite managed to breach its pre-pandemic highs. It remains reasonably valued for a reason.
The pandemic has hit Restaurant Brands hard, relative to its peers. Pandemic-related restrictions have hampered growth at the company’s Tim Hortons banner the most significantly. Indeed, Tim Hortons has remained the laggard for Restaurant Brands of late, and many investors have seemingly moved on from this growth stock of late.
But not so fast.
With the pandemic (hopefully) coming to a close soon, there’s a lot to like about Restaurant Brands’s prospects. This stock remains a top reopening play today for those who believe in the company’s long-term growth potential.
Over the longer term, I expect Restaurant Brands to continue to grow nicely. Recent relatively strong results speak to the impact the pandemic reopening is having on earnings. The company reported a 3% and 13% year-over-year increase in revenue and adjusted net income, respectively. That’s certainly not great but not bad either.
I think the coming quarters look a lot brighter for Restaurant Brands. This is a stock that should be on every long-term investor’s watch list right now.
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Royal Bank of Canada
Royal Bank is a financial behemoth, both in and outside Canada. It is one of the go-to stocks for long-term investors, and rightly so. Royal Bank’s reliable dividend payout and earnings-per-share growth provide for incredibly consistent long-term returns for investors. Moreover, the company has diverse revenue sources. Unlike some of its retail-concentrated peers, Royal Bank’s strong capital markets and wealth management division elevate this stock above its peers.
Nearly 45% of the Royal Bank’s earnings come from its personal and commercial lending. While Royal Bank earns around 25% and 26% from wealth management and insurance operations, nearly 4% comes from treasury services. Additionally, these revenue streams are well diversified geographically. Approximately one-quarter of the bank’s business in the U.S., with around 58% of Royal Bank’s lending taking place in Canada. This is great for long-term investors seeking diversification.
Royal Bank provides investors with a rock-solid dividend yield of 3.5% and remains a top idea for any long-term investor today.
Do you like these top long-term buy and hold picks? Here are a few more we think could spruce up your portfolio:
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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 recommends RESTAURANT BRANDS INTERNATIONAL INC.