Generating market-beating total returns (capital appreciation and dividends) from one’s holdings certainly seems like a worthwhile goal. However, such stocks aren’t as easy to find as many investors might think.
That said, there are quite a few examples of Canadian stocks with a strong historical track record of providing total returns, as well as an impressive outlook in this regard. Here are my top three picks right now for investors seeking total return.
Top total return plays: Toronto-Dominion Bank
TD Bank has been able to generate impressive growth over its track record in large part due to the bank’s international exposure. As one of the leading retail banks on the U.S. east coast, TD has provided excellent growth over its storied history.
This has provided investors with remarkably stable cash flows, which TD has paid out in the form of dividends over time. Indeed, as soon as regulators allow for dividend hikes, I believe TD Bank will be one of the first to do so. Accordingly, the company’s current yield of 3.7% is artificially low in this regard.
One of the best growth plays in Canada, with a hefty dividend to boot, is Restaurant Brands (TSX:QSR)(NYSE:QSR). This fast-food purveyor is one of the leading conglomerates in the world in this regard. The company’s Tim Hortons, Burger King, and Popeyes Louisiana Kitchen provide investors with access to some of the best brands in this space. For those with a truly long-term investing time horizon, these brands provide an attractive moat around Restaurant Brands’s business.
I view this stock as one having among the most robust growth profiles on the TSX right now, at its current valuation. The company’s substantial dividend yield is simply the cherry on top.
Indeed, from a total return perspective, there’s a lot to like about how Restaurant Brands fits within a well-diversified portfolio right now. Additionally, there’s an attractive pandemic reopening thesis with this stock I see as paramount for investors considering QSR stock right now.
Kirkland Lake Gold
Indeed, this company’s dividend (as well as Agnico Eagle’s dividend) is much higher than the sector average. As a total return play in the mining sector, investors really have a lot to like about buying either stock.
I think the balance sheets of both companies as well as the attractive growth profile these mining stocks provide make either Kirkland Lake or Agnico Eagle top buys right now.