If there was a single word to describe how the market has performed over the past year, it would be volatile. Post-pandemic supply woes, the war in Ukraine, out-of-control inflation, and rising interest rates have all taken a toll on the market. Fortunately, there is a way for new investors to overcome that volatility and win in the market.
Here’s a look at two stellar investment options that combine growth and income-producing options that will counter volatility, too.
If you need to buy a bank now, here’s one to buy now
Canadian Imperial Bank of Commerce (TSX:CM) is neither the largest nor most well known of Canada’s big banks. In fact, CIBC is known to have a smaller international presence than its peers.
CIBC compensates for this by holding a relatively larger (compared with its size) mortgage book when compared with its peers. This has made the bank a somewhat more volatile option to consider right now.
In fact, over the trailing 12-month period, CIBC has dropped more than its peers; as of the time of writing, that dip is a whopping 28%. To put it another way, that larger mortgage portfolio is already priced into the stock price.
So, then, why is CIBC being touted as a stock to help investors win in the market?
That has to do with the eventual recovery. Canadian banks have historically fared better than their U.S.-based peers. And CIBC, despite its steep drop, has shown immense tenacity in the past to overcome volatility and return (rather quickly) to growth.
In other words, the market will recover, and CIBC will bounce back. Until that happens, the stock trades at a steep discount.
Prospective investors should also keep in mind two other key points when it comes to CIBC. First, the bank underwent a stock split last year. While this event doesn’t generate any growth, it does lower the price of entry for new investors.
That combined with the already discounted rate on the stock means that prospective investors can acquire a pile of shares for the fraction of the price that CIBC’s peers ask for.
By extension, that discount also means that CIBC’s dividend yield has swelled. As of the time of writing, the yield works out to an insane 5.99%.
Buy something on the way home and get rich
Few investors may realize (at least initially) that Alimentation Couche-Tard (TSX:ATD) is a superb long-term investment to consider. That’s because the gas station and convenience store owner operates a business that isn’t really a destination we think of — yet.
Gas stations and convenience stores are interim stops that are usually unplanned that we make enroute to a destination. They provide a necessary service and generate a fair amount of revenue from the small items we grab while on the move.
For those unfamiliar with Couche-Tard, the company is huge. Couche-Tard is one of the largest companies in its respective field on the planet, boasting approximately 14,000 locations across 26 countries.
Incredibly, Couche-Tard has grown into that position in a very short time. The company has taken an aggressive stance on growth, targeting smaller, regional players as acquisition targets. This allows Couche-Tard to take the best aspects of each acquisition and grow into new markets with ease.
That appetite for growth isn’t slowing. In fact, Couche-Tard is expanding into new areas where there is significant long-term growth. Specifically, the company is building out an electric vehicle charging network across North America, following similar success in Europe.
The company is also actively engaged in adding complementary businesses, such as car washes, to its growing portfolio.
That insatiable appetite for growth coupled with strong results is part of the reason why Couche-Tard’s stock has soared 18% in the trailing 12 months.
Go on; be a stock omnivore: Win in the market
No stock is without risk, and that includes both Couche Tard and CIBC. Fortunately, both stocks are established leaders and have significant long-term growth potential.
In my opinion, one or both stocks would do well for investors looking to win in the market over the long term as part of a larger, well-diversified portfolio.
