2 “Boring” Stocks That Have Handily Beaten the Market – and Could Keep Doing It

Boring stocks may be, well, boring, but that’s way better than exciting stocks that dip and jump. These two market-beaters are far better.

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Investors may start out impulsively making their stock choices because it seems too exciting! You can invest in anything online, with so much research available. And that’s certainly wonderful! But if you’re getting into investing for the excitement, head to a casino instead.

Making these choices based on excitement and the potential growth of some new start up isn’t a smart move. Instead, boring stocks are a far better choice. Boring stocks provide stable, long-term returns. And those returns can bring in far more income than any exciting start up can.

So let’s look at two boring stocks that have beaten the market in 2023, and could certainly continue this trend.

The North West Company

Now retail companies shouldn’t do well during recessions. After all, consumers spend less when there are downturns. However, there are certain areas where downturns don’t matter in terms of essentials. That’s certainly the case for The North West Company (TSX:NWC).

North West stock has done well quarter after quarter because it focuses on underserved areas of Canada. It places its retail locations in underserved urban neighbourhoods, or in rural areas such as northern Ontario. So frankly, there isn’t any competition. With only one place to buy your milk, you’re not exactly going to see a downward trend in sales.

Shares of North West stock are now beating the market, up 8% versus a decline of 7% for the TSX in the last year. Year to date, NWC stock is up 9%. However, it still trades at a valuable 15.5 times earnings, and offers a 3.88% dividend yield as well.

CP stock

Another stock that could be considered boring is Canadian Pacific Railway (TSX:CP). After all, it’s just a transportation service, right? Yet, it’s these steady revenue streams from multiple sources that’s made the company so stable over the years. And that’s about to climb immensely.

After winning the bid for Kansas City Southern, CP stock is soon to become Canadian Pacific Kansas City Railway. This new company is the only railway to run from North America down to Mexico. That’s a huge win, as it can now transport Canadian oil and grains, for example, down to Mexico, and bring the cars and other resources made there along the way right back.

With little overlap before the merger, this will bring in multiple new revenue streams for CP stock. Investors have already seen shares climb steadily upwards by 9% in the last year and 4% year to date. Yet, when the merger goes public, it could send shares even higher in the short term. Yet, long-term investors will certainly want to hold out, as this responsibly managed boring stock has even more gains to make.

Bottom line

When it comes to investing, think boring. Boring stocks have long-term gains and stable revenue. These boring stocks will continue to produce that revenue no matter what owing to their share of the market. In terms of North West stock and CP stock, these two market-beating companies certainly have more gains to go.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has positions in Canadian Pacific Railway. The Motley Fool recommends Canadian Pacific Kansas City and North West. The Motley Fool has a disclosure policy.

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