The pandemic has provided whip-sawing stock prices this past year. Accordingly, investors may be enticed to steer clear of the economic turmoil and seek greater defensiveness and diversification.
Well, these three stocks provide these factors in spades. Here’s why I think these three stocks deserve a hard look by long-term investors today.
Alimentation Couche-Tard
Alimentation Couche-Tard (TSX:ATD.B) has continued to be one of my top picks for quite some time now. One of the best consolidators in the gas station and convenience store segment, the company’s growth-by-acquisition strategy has performed extremely well for shareholders over the long term.
However, of late, the company has been penalized for its deal flow — or, rather, the lack thereof.
A failed bid for French grocer Carrefour was also looked down upon by the market in a big way. Indeed, the correction that was caused by this bid was one I didn’t see coming.
That said, it appears investors are hoping for more attractively priced deals focused on the company’s core lines of business. While I think Couche-Tard’s move into retail was a smart one, the market has voted, and it disagrees.
That said, now could be a great time to pick up shares of this beaten-up growth gem. The company trades at only 15 times earnings and provides a small but meaningful dividend to patient investors willing to wait. It’s a great diversification play at a time when most stocks are overvalued today.
Kirkland Lake Gold
Speaking of diversification, what’s better than picking up shares of a high-quality gold miner today?
And in this space, there’s really no better option than Kirkland Lake Gold (TSX:KL)(NYSE:KL) right now. This top-notch gold miner provides investors with access to some of the best high-grade mining operations in the world. It’s a mid-cap miner with a tonne of long-term cash flow growth upside. And it’s now paying out a dividend yield of roughly 1.8% — absolutely absurd in the gold mining space.
Indeed, Kirkland Lake’s pristine balance sheet is a sight to behold. The company’s been able to create best-in-class operating margins via prudent cost-containment strategies and a focus on asset quality.
With gold prices on the rise of late, I remain bullish on Kirkland Lake’s cash flow prospects over the long term. This gold miner is valued at less than 16 times earnings, despite these catalysts. It’s a steal today.
Enbridge
For investors seeking income, growth, and value, Enbridge (TSX: ENB)(NYSE: ENB) has it all.
This reliable pipeline play has been a steady producer for investors over the long term. The company’s increased its dividend for 25 years straight, providing a CAGR of 14.3% to long-term investors. Enbridge’s current yield of 7.3% is high relative to its historical average and that of the sector. However, for those bullish on the company’s ability to sustain modestly growing cash flows over time, this yield isn’t impossible to maintain.
Of late, Enbridge’s management team has committed to cutting its annual dividend rate increase to around 3% a year. The funds that would have gone to increasing its dividend will go to debt reduction and balance sheet improvement initiatives. Such moves are prudent and make this stock a screaming buy today.
