Warren Buffett is one of the best investors in the world. There is no doubt that he’s brilliant. But his discipline, patience, and commitment to invest for the long-run has arguably had more of an influence on his success than his raw intelligence. So when looking for the best Canadian stocks to buy now, it’s helpful to consider how Buffett invests.
Usually, though, when investors look at what Buffett is investing in, they look at his current stock portfolio. And while that can be useful, I think it’s far better to look at the wholly-owned businesses that his company, Berkshire Hathaway, owns.
The stocks he owns could help show what he is bullish on today. However, the companies he owns long-term show the business and industries he is happy and comfortable to own forever. These will be the best stocks we want to buy for our portfolio.
After all, one of Buffett’s most famous quotes about investing is, “Our Favourite holding period is forever.” So it’s reasonable to assume the companies he wholly owns and likely plans to hold forever are some of the best companies you can invest in.
So if you’re looking for some high-quality Canadian stocks to buy now, here are three to consider.
Warren Buffett loves insurance
No industry’s been more influential on Buffett’s success than insurance. GEICO was one of the first investments Buffett ever made, and since then, he has expanded his insurance business considerably.
There are a few attractive insurance companies to invest in Canada, one of which is Manulife Financial (TSX:MFC)(NYSE:MFC). And fortunately for investors, now is an excellent time to buy the Canadian stock given that it’s trading at such an attractive valuation.
The company has a massive insurance and wealth management business across North America. Furthermore, it has years of growth potential in Asia, making it an excellent stock to own for the long haul.
Plus, with interest rates primed to start seeing some increases over the next year, now is an excellent time to take a position in this massive financial company.
It likely won’t remain cheap for very much longer. So if you’re looking to invest like Warren Buffett and take advantage of an attractive discount, Manulife is an excellent stock to buy now.
Railroads are exceptional long-term investments
Another one of the most famous industries that Warren Buffett loves to find investments in is railroads. He has owned railroad stocks in the past, and today, his company wholly owns Burlington Northern Santa Fe Railway.
One of the reasons why rail stocks are so ideal is that it’s one of the most efficient ways of transporting goods. This makes it a cheap way to move goods that gives the railroads a significant competitive advantage.
Even over time, as we produce less coal (and railroads start to lose this revenue because their economics are more attractive than other modes of transportation), they should be able to fill the capacity quickly.
So if you’re looking to invest like Buffett and invest in the railroads, a stock like Canadian National Railway is one of the best stocks you can buy and hold long-term.
Utilities offer consistent low-risk growth
Finally, another massive industry that Warren Buffett’s company has made several investments in over the years is utilities. In fact, the company has its own utility subsidiary, Berkshire Hathaway Energy, which is 90% owned by Berkshire Hathaway.
Utilities are one of the best industries to invest in for the long-term, considering all the low-risk and consistent growth you can earn, especially if you find a high-quality stock to invest in.
Luckily for investors, there are several attractive utility stocks to buy today, such as Algonquin Power and Utilities.
Algonquin is an exceptional choice since it’s a low-risk utility stock, but it also has a significant amount of green energy exposure. In addition, like many utility stocks, it’s a Dividend Aristocrat, meaning it increases its dividend each year. And because the stock is so cheap today, you can buy it at an attractive discount while it offers an impressive 4.8% yield.
So if you want to invest like Warren Buffett and buy a top utility stock, Algonquin is one of the best to buy today.