Ever since the stock market made its rapid recovery, it’s been continuing to hit new all-time highs. This has been impressive and rewarding for a lot of investors. However, it also makes it difficult to find high-quality Canadian stocks that you don’t have to overpay for to buy now.
There are certainly some stocks offering potential. However, most high-quality stocks will be trading at a premium today as the market sets new highs.
And while it’s basically impossible to know when a pullback might happen. We know that at some point, there inevitably will have to be one, as market cycles are normal.
So here are two of the best Canadian stocks I’ll certainly be looking to buy the next time there is a correction.
The top growth stock in Canada to buy on a pullback
Shopify is a stock that’s put up impressive growth numbers for years. And this morning, it continued that trend beating analyst estimates once again.
Shopify is the perfect stock to demonstrate why investing in quality is often worth the premium. My favourite Warren Buffett quote says, “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” And stocks don’t get much more wonderful than Shopify.
It’s a revolutionary company in an industry with major long-term growth potential. So even though it’s rallied rapidly over the last few years, the stock still has decades of potential to expand its operations.
Stocks this wonderful almost always trade with a significant premium, though. That’s why it’s one of the top Canadian stocks to buy on the dip. As soon as you think this wonderful stock is at a fair value, I’d pull the trigger. It might be one of the best investments you ever make.
A top Canadian infrastructure business
Another high-quality Canadian stock I’d be looking to buy on a pullback is Brookfield Infrastructure Partners (TSX:BIP.UN)(NYSE:BIP).
Brookfield is a unique company with few stocks offering anything similar. The stock offers investors an attractive portfolio of some of the highest-quality infrastructure assets around the world.
It has four main segments, which include utilities, midstream, transportation, and data infrastructure. And not only are its operations diversified by sector and industry, but by geography too. Brookfield owns assets on five continents and more than 10 different countries.
In addition to these high-quality and defensive assets, though, another reason it’s such a high-quality long-term stock is that it continues to recycle capital by selling off mature assets and reinvesting in new projects. Brookfield has done this consistently for years and is one of the best in the business at managing capital.
Plus, the company’s main objective has it targeting up to 15% average annual growth for investors over the long term in addition to up to 9% annual distribution growth. These are ambitious goals. However, they are not surprising, nor are they impossible for a high-quality stock like Brookfield.
Investors know the quality you can get with this Brookfield investment, which is why it’s usually trading at a bit of premium. So anytime you can buy this top Canadian stock at a discount, it will be well worth it.
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 Daniel Da Costa owns shares of BROOKFIELD INFRA PARTNERS LP UNITS. The Motley Fool owns shares of and recommends Shopify. The Motley Fool recommends BROOKFIELD INFRA PARTNERS LP UNITS and Brookfield Infrastructure Partners and recommends the following options: long January 2023 $1,140 calls on Shopify and short January 2023 $1,160 calls on Shopify.