There’s rarely a no-brainer stock. Even the most seemingly robust and reliable stock can falter under the wrong circumstances. However, some stocks have a track-record of outperformance during good times and limited drawdowns during bad times. These are the closest thing we have to “no-brainers.”
If you have $300 ready to deploy, here are the top three no-brainer stocks that should be on your watch list.
If you’re looking for a safe place to park your cash, Alimentation Couche-Tard (TSX:ATD) is a reliable bet. The company owns one of the largest networks of gas stations and convenience stores across the world. The stock is up 14,652% over the past 24 years — implying a compound annual growth rate of 23%.
Much of this growth has been fueled by savvy acquisitions. The company has rapidly expanded its network from Europe to Asia via corporate buyouts. Unfortunately, the economic turmoil of the past few years gave it little opportunity to acquire valuable assets. That’s why cash piled up on its balance sheet.
Last month, the company finally sealed a deal for 2,000 gas stations across Europe. These locations were purchased for $3.3 billion from energy giant TotalEnergies. Once completed, this transaction could boost Couche-Tard’s bottom line. Keep an eye on this stock, as it trades at just 17.8 times earnings.
Fortis (TSX:FTS) is the gold standard for Canadian investors. The company’s track record of delivering cash rewards to shareholders is nearly unparalleled. Fortis has hiked its dividend every year for 50 years! Right now, it offers a 3.8% dividend yield, which is on par with the industry average.
The utility giant is a defensive stock, which means it is somewhat resistant to recessions and bear markets. During the stock market correction of 2020, Fortis lost just 6% of its value. This year, the stock is outperforming. FTS is up 8.5% since January while the S&P/TSX Composite Index is up only 4.9% over the same period.
The underlying business is also thriving. The company reported $370 million in net profit during the last quarter of 2022. That’s 12.8% higher than the same period of the previous year. This performance should allow Fortis to keep hiking dividend payouts for the foreseeable future. Keep an eye on this no-brainer stock.
Tech stocks are not the most reliable. Most startups are unprofitable while mature tech stocks are vulnerable to disruption. However, some stocks hit the right balance between growth, profitability and durability. I believe Constellation Software (TSX:CSU) fits that category.
The company owns a broad portfolio of niche vertical enterprise software products. These are mission-critical software solutions that help with mundane tasks like accounting and inventory management. That means the subscriptions are sticky. Meanwhile, half of the company’s clientele is government agencies, which means its revenue is less susceptible to recessions.
The stock is up 23% year to date and is currently trading at an all-time high. Add it to your “no-brainer” watch list for 2023.