A great summer reopening could be in the cards, as Canada winds down from its third major COVID wave. More jabs are being put in arms. And to combat vaccine hesitancy, various provinces are considering so-called vaccine lotteries.
The province of Alberta is the latest to announce its vaccine lotto, with three separate $1 million prizes to be rewarded throughout 2021. The lotto incentivizes following up on second doses (two entries require full vaccination to be eligible) and should help the province accelerate its vaccination efforts, as it looks to move forward with its “reopen for summer” reopening plan.
Moreover, vaccine passports may also be thrown into the equation, which should improve Canada’s chances of achieving herd immunity, despite new COVID variants of concern. At this juncture, it certainly seems as though Canada is about to follow in the footsteps of the U.S., which looks to have conquered COVID, at least for the time being.
Top Canadian reopening stocks for a 2021 summertime return to normalcy
Although reopening stocks have been bid up in a big way over this past year, there’s still some hesitancy with some of the riskier names that are more dependent on the elimination of the insidious coronavirus. Think companies like the airlines that won’t reach 2019 levels of business until provinces are fully reopened and most, if not all, COVID restrictions are lifted.
It’s these aggressive reopening plays that I believe could have the most room to run into the summer of 2021. Sure, an undiscovered variant could derail Canada’s summer reopening, but I’d pin such a high-impact risk as having a low probability of occurrence. In any case, I think investors should start accumulating shares of the last of the Canadian reopening stocks before they’re able to correct to the upside if it turns out that this third wave of COVID is the last.
Cineplex is one of the best domestic reopening stocks on the TSX Index. While Air Canada may be the more popular play among millennials, I view it as more of an international reopening play, given a huge chunk of its normalized revenues are derived from international travel.
Undoubtedly, Canada’s reopening will probably be quicker than most other countries, given the impressive number of vaccine shipments incoming. There will be more than enough vaccines to get everyone their two jabs. Heck, Canada could have a vaccine glut on its hands going into the latter part of the year, as daily dose administrations pull back.
As Canadian consumers feel more confident about going out for the summertime reopening, I think Cineplex will finally have permission to soar. The summer reopening is real, and while Cineplex won’t be able to fill every seat with a bum initially, it will have the means to sustain a recovery that’s likely far closer than most expect.
Restaurant Brands International
Restaurant Brands is another Canadian reopening play that I believe will outperform in the second half, as it looks to make up for lost time in what could be a very “normal” summer for Canadians. People are sick of eating their own cooking, and they’re going to be headed back to their favourite restaurant dining rooms once COVID cases nosedive and restrictions are lifted.
Add Restaurant Brands’s restaurant modernization efforts into the equation, and I think it’s absurd that QSR stock is still off considerably from its all-time high, while most other restaurant stocks are at fresh all-time highs. With shares trading at a compelling discount to many peers in the fast-food space, I think investors should load up before the company pulls the curtain on a blowout quarter against very favourable year-over-year comparisons.
The stock yields just over 3% and is one of my favourite low-risk reopening plays for those bullish on a summertime return to normalcy.
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 Joey Frenette owns shares of RESTAURANT BRANDS INTERNATIONAL INC. The Motley Fool recommends CINEPLEX INC. and RESTAURANT BRANDS INTERNATIONAL INC.