If you’re building a portfolio in the present environment and expect positive returns plus recurring income streams over the long term, focus on the top-growing stocks on the planet.
Brookfield Asset Management (TSX:BAM.A)(NYSE: BAM), Alimentation Couche-Tard (TSX: ATD), and TFI International (TSX: TFII)(NYSE: TFII) are sound choices because the respective businesses should benefit from long-term trends and grow exponentially in the coming years.
Diverse income sources
Brookfield Asset Management (BAM) is a quality stock due to its specialization in three critical sectors, namely property, infrastructure, and renewable energy. This $99.6 billion asset management firm is also the parent company of Brookfield Property Partners, Brookfield Renewable Partners, Brookfield Infrastructure Partners, and Brookfield Business Partners.
The business structure is an advantage because of the diverse income sources from four profitable partnerships. Despite the 39.3% drop in net income in Q2 2022 versus Q2 2021, BAM reported record inflows of US$56 billion. The REIT also realized a gain of US$5 billion from asset sales worth $21 billion.
On BAM’s competitive advantage, Nick Goodman, CFO, said, “We delivered strong results in the second quarter, supported by our resilient global portfolio of inflation-protected real assets and record levels of fundraising. The scale, stability, and diversity of our business continues to differentiate our franchise with our investors and clients.”
Although the stock is down 15.8% year to date, it remains a strong buy. The many verticals will enable more growth in the foreseeable future. Liquidity won’t be a problem either, given the strong balance sheet. BAM struck a US$30 funding partnership with Intel recently to help finance the factory-expansion ambitions of the chipmaker. At $63.8 per share, the dividend yield is 1.15%.
Industry powerhouse
Couche-Tard, the powerhouse in the convenience store sector, is a good long-term hold. Many consider this $60.4 billion company the top-of-mind choice in the fragmented industry. Business is thriving as evidenced by the 14% increase in net earnings in Q1 fiscal 2023 to $872.4 million versus the year-ago quarter. Despite lower fuel demand, revenue for the quarter grew 37.4% year over year to $18.7 billion.
President and CEO, Brian Hannasch, said, “It’s clear that the high fuel prices in the quarter and overall inflationary pressures are temporarily impacting our consumers’ driving and fueling behaviours.” Nevertheless, the consumer staples stock is beating the broader market year to date, up 12.18% against a decline of 8.66%, respectively. The current share price is $59, while the dividend yield is a modest 0.74%.
Growing diversity in end markets
Higher fuel costs and driver shortages are the biggest headaches of the largest trucking company in Canada. Still, TFI International reported strong financial results in Q2 2022, notwithstanding the volatile market conditions. In the three months ended June 30, 2022, total revenue and adjusted net income increased 31.9% and 75.7% year over year, respectively.
According to management, the balance sheet remains TFI’s pillar of strength. It enables the company to continue seeking attractive growth opportunities to create long-term value. Of its future growth prospects, Chairman, President and CEO, Alain Bédard, says TFI has a wealth of internal levers to drive efficiencies and growing diversity in its end markets. The industrial stock ($125.95) currently pays a 1.04% dividend.
Long-term investments
Stock investing seems daunting in 2022. However, in spite of rising interest rates and threats of recession, it’s worth going long on three of the top-growing stocks on Earth.
