Investors looking for decent returns in today’s market have increasingly sought out growth stocks. Indeed, the capital appreciation these stocks have provided is tremendous. However, for more conservative long-term investors, looking for total-return stocks can be a safer move.
Given where valuations are today, receiving a mix of capital appreciation and dividend income seems prudent. In this respect, here are my two top Foolish picks for November.
Top total return stocks: TD Bank
Toronto-Dominion Bank (TSX: TD)(NYSE: TD) continues to be one of my top picks for long-term investors. Indeed, as far as total-return stocks go, TD Bank has an incredible track record.
Now, the past isn’t any guarantee of future performance. However, it’s a benchmark investors can use to gauge what the future might hold. In this respect, TD has won my attention as a top total-return stock.
The company’s recent results show strength, despite record-low interest rates. My view is that as rates rise (which I expect they will soon), banks like TD could really outperform. Big banks benefit from higher net interest margins in higher-rate environments. Accordingly, this stock is one I view as a quasi-hedge on inflation right now.
Additionally, the company’s dividend yield of 3.5% and otherwise solid balance sheet are intriguing to me. I think TD is likely to raise its dividend in the coming quarters, when regulators say it’s safe to do so. And as the economy (hopefully) recovers from this pandemic, TD stock could outperform relative to its peers.
Restaurant Brands
Another company I’ve viewed as one of the best total-return stocks in the market for some time is Restaurant Brands (TSX: QSR)(NYSE: QSR). There are many reasons for this.
As a fast-food conglomerate, Restaurant Brands is among the most defensive stocks in the TSX. This company’s business model provides for cash flow stability and a long-term growth trajectory that’s hard to come by. With banners such as Burger King, Popeyes Louisiana Kitchen, and Tim Hortons in its portfolio, there’s a lot to like about how Restaurant Brands is positioned.
On the dividend front, QSR stock currently pays investors a dividend yield of 3.7%, which is certainly healthy. My view is that Restaurant Brands and TD in a well-diversified portfolio make a lot of sense right now. These companies have proven to be great long-term holdings. Right now, I think both stocks are attractive on their recent dips from all-time highs.
