Allocating money in top TSX stocks has turned out well for investors over the long term. That said, the TSX has been an unfriendly place to investors during downturns and periods of low commodity prices. Right now, the tides have turned, making Canadian stocks one of the markets foreign investors are finally looking at.
That said, there are a couple top TSX stocks I think are worth looking at, given their global presence. Restaurant Brands (TSX:QSR)(NYSE:QSR) and Constellation Software (TSX:CSU) are two of the best operators in this market, trading at much more attractive levels.
Here’s why these companies may be the long-term compounders investors want to consider now.
Top TSX stocks: Restaurant Brands
Restaurant Brands International features among the world’s largest fast-food restaurant chains. It is a conglomerate behind the likes of Popeyes, Firehouse Subs, Burger King, and Tim Hortons.
The lifting of pandemic restrictions resulted in a spike in the restaurant business revenue last year. Additionally, QSR stock did rise on a number of occasions, mostly due to impressive results and a more bullish outlook on this sector.
However, Restaurant Brands is a company that’s also trended downward with the overall market. Despite being a defensive option (some would say a hedge) to battle market volatility, this company’s valuation has taken a hit. Sure, some could argue Restaurant Brands wasn’t cheap. But now, it’s a stock I think has excellent upside potential from here.
As the economy continues to move forward, potentially into a recession, fast food is one place in the market that should provide growth. For investors looking for stable places to hide, this stock continues to be one of my top picks.
Constellation Software
Speaking of growth, Constellation Software stock has continued delivering impressive performance. This software conglomerate has a long-term stock chart most investors would envy right now.
That said, like the broader market, Constellation Software has also seen a valuation hit. Currently, this company’s stock price remains approximately 20% below its all-time high. For a company that only seems to make new all-time highs on an annual basis, this is the kind of dip many investors were waiting for.
Constellation pays a small dividend of around 0.3%. However, this growth-by-acquisition company is more focused on re-investing its cash flows into new deals over time. Indeed, Constellation Software has been one of the best roll-up plays on the market for decades for this reason.
This is a company with a world-class management team and a proven strategy for growth that should not be overlooked. At this sort of discount, I think investors are getting an enticing entry point. Those worried about upcoming recession woes may want to ease into a position. However, over the long term, I think both of these top TSX stocks are worth considering at these levels.
