The Canadian stock market looks full of upside opportunities for Canadian investors to take advantage of today. As global economies recover from the pandemic, markets should, theoretically, continue to favour the Canadian equity securities market.
The Canadian stock market is still trading for a discount compared to its American counterpart. Consumer spending had been relatively cautious during the pandemic. As all the sectors of the Canadian economy see a robust economic demand stemming from improving financial conditions, investors might find excellent investment opportunities if they know where to look.
I will discuss two top Canadian stocks that you could consider adding to your portfolio this summer if you want to add stocks with excellent long-term value.
Brookfield Asset Management
Brookfield Asset Management (TSX:BAM.A)(NYSE:BAM) had a terrific year in 2020, and it looks well positioned to continue this year on a solid note. As interest rates remain near all-time lows, bonds and other fixed-income assets cannot compare to high-yield assets available to Canadian investors. Brookfield Asset Management offers investors exposure to a diverse portfolio of alternative assets.
Managing more than $600 billion in assets, BAM is already a massive company. The asset management company could grow even more in the coming decade to possibly cross the fabled $1 trillion mark in assets under management. BAM boasts some of the top value-focused and contrarian asset managers that the industry has to offer. The company benefits strongly from buying distressed assets during volatile markets and selling them at higher valuations when market conditions improve.
The company’s strong asset sales have subsequently resulted in massive earnings for the asset management firm. A bolstered balance sheet for the next cycle is ready for BAM, making it an ideal asset to buy and hold for the long run.
Canadian National Railway
Canadian National Railway (TSX:CNR)(NYSE:CNI) presents the perfect opportunity for long-term investors looking for value stocks. Whenever railroad stocks trade at depressed prices, value investors with a long-term investment horizon can pick up shares in droves to enjoy substantial capital gains in the long run. CNR is currently the largest railroad network in the country, and it can become the largest in North America if it can complete its Kansas City Southern acquisition.
Acquiring Kansas City Southern is not going to be an easy feat for Canadian National Railway. There are several legal and regulatory barriers for the company to contend with. Combined with the high price for the acquisition, the two parties face significant obstacles that the companies need to overcome to complete the deal.
CNR stock is trading for an almost 12% discount from its April 2021 high, reflecting an uncertain market outlook regarding this acquisition deal. If the deal comes through, however, CNR could gain a massive competitive edge over its peers in North America and fuel its growth for decades to come.
Brookfield Asset Management stock and Canadian National Railway stock could be outstanding stock picks to consider adding to your portfolio. Shares of the two companies can provide you with significant long-term wealth growth through capital gains. BAM stock and CNR stock are also stellar income-generating assets that can help you achieve your financial goals if you want to create a portfolio of dividend stocks to generate passive income for you.
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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Brookfield Asset Management. The Motley Fool recommends Brookfield Asset Management Inc. CL.A LV and Canadian National Railway.