Canadian investors should stick out the great American bear market. As markets swing wildly, dividend-rich stocks may be worth a second look, as they’ll pay you handsome dividends for waiting for a recovery to arrive.
Even if the bear is alive and well, there’s no arguing that it’s getting long in the tooth.
The average bear lives just north of nine months. After the latest tumble in the S&P 500, all it’ll take is one bad day to be down 20% from the December 2021 peak. Indeed, this bear market seems like it’ll last forever. Stocks have been stuck in a rut for around 15 months now. Regardless of how much longer the bear will drag down broader markets, investors should be ready for the inevitable bull that will follow.
Longer-term investors need not worry so much!
If you’re committed to staying invested for the next five to 10 years, this old bear market should not have you hitting the sell button.
While nobody knows if the bear will conclude this year or next year, I think those who plan to ditch stocks with the intention of getting back in when the next bull lands will run the risk of missing out on a lot. You see, the biggest gains tend to come in the early stages of a new bull market. New bulls are born in the latter stages of a bear market. And that tends to be the time when many lose patience, thinking the bear will last forever.
As markets digest a new slate of risks hitting the banking sector while watching the Fed (U.S. Federal Reserve) closely, there’s bound to be a lot of angst-inducing noise. Instead of fretting over what you can’t control, focus on scanning the TSX Index for market bargains. When markets get choppier, deals get better. And if you’ve got the cash, it may be time to act, even if you’re feeling uneasy over the volatility.
Consider Restaurant Brands International (TSX: QSR): one dividend payer worth another look.
Restaurant Brands International
Restaurant Brands is the Canadian fast-food chain behind Canadian icon Tim Hortons and burger giant Burger King.
The stock recently slipped 9% off its 52-week high on the back of broader market volatility. Despite the company’s transformative efforts and new folks in management (new chief executive officer and Patrick Doyle aboard over at Burger King), the stock has continued to drag in recent weeks. I think the dip is completely buyable. As a fast-food juggernaut, Restaurant Brands can continue growing profits through a recession.
Nobody knows how the recession will last, but I think Restaurant Brands will be far less impacted than most other Canadian firms. Fast food tends to be a fast seller when times get tough!
At 18.59 times trailing price to earnings, I view QSR stock as a bargain. The 3.46% dividend yield is a fine bonus for a year that I think could see new highs be reached.
