This year has turned out to be an interesting one for investors. Several stocks skyrocketed this year: some with potential and some without. However, investors focusing on generating reliable long-term returns will always gravitate toward value. In this regard, Kirkland Lake GoldĀ (TSX:KL)(NYSE:KL),Ā and Maple Leaf FoodsĀ (TSX: MFI) are among the best stocks on the TSX today.
Here’s why.
Kirkland Lake Gold
Gold has traditionally been a safe-haven play for investors over time. However, gold miners haven’t been that great of an investment in recent decades. Years of mismanagement with respect to capital allocation have given gold miners a bad name. Accordingly, these stocks now trade at a relative discount to the value of gold we haven’t seen in a long time.
However, there’s hope for investors. This discount provides a value opportunity to get into high-quality miners like Kirkland Lake at a discount.
Kirkland Lake is certainly cheap from a valuation standpoint. The company continues to trade at a low-double-digit price-to-earnings multiple. Compared to where the broader market is today, that’s dirt cheap.
Additionally, relative to the rising price of gold and best-in-class margins, Kirkland Lake seems like a no-brainer at these levels. The company’s balance sheet is pristine, with the company carrying essentially no debt. Furthermore, Kirkland Lake has built a substantial war chest to be used to enhance its reserves over time.
All in all, this is one of the best value picks in the market today. Those seeking long-term growth and income can’t go wrong with this high-growth portfolio hedge.
Maple Leaf Foods
As far as defensive stocks go, Maple Leaf is among the top on my list.
Indeed, we all need to eat. The essential nature of the products Maple Leaf provides can often be lost on investors. However, as consumption increases over time and investors seek defensiveness in their portfolios amid higher volatility, I think stocks like Maple Leaf are poised to do very well.
Like Kirkland Lake, Maple Leaf has one of the best balance sheets in its sector. This is a company with a valuation multiple that isn’t quite as attractive as Kirkland Lake’s right now. However, Maple Leaf’s defensive attributes and long-term growth prospects make this stock appear cheap at these levels.
The company has remained highly flexible in its strategic approach to generating growth. Maple Leaf has diversified its product offerings to meet the changing preferences of its consumer base. Various plant-based protein options are taking off, providing investors with a level of growth not usually attributable to this play. For those bullish on this unique growth segment of the food industry, Maple Leaf is a large-cap way to play this trend.
