Food stocks have been eating up returns over the last few months. Canadian investors continue to seek out safe choices during this downturn. While we’re not out of the woods yet, more are looking for growth as we eventually transition from defensive stocks to going on the offence.
In the case of these three food stocks, however, you can get both. Each offer stable growth that we’ve seen for years. They remain safe choices, but also ones that are due for growth after a downturn as well.
So, let’s look at three food stocks to consider on the TSX today.
Loblaw
Loblaw (TSX: L) continues to be an excellent choice for investors wanting diversification within the food industry. Loblaw stock has exposure to food through its multiple storefronts, including No Frills and Real Canadian Super Store. However, it has even more exposure that it’s gained over the last few years.
Loblaw stock now holds ownership over Shoppers Drug Mart as well, has partnerships with Esso gas locations, and has the successful PC Optimum program. This loyalty program has been wildly successful. Loblaw also created PC Financial. This alone has given Loblaw stock exposure to growth in the financial sector.
Loblaw stock is now up 7.5% in the last year, as of writing, with a 1.44% dividend yield. After making through a pandemic and now an economic downturn, it looks like Loblaw stock is only due to rise from here.
Restaurant Brands
Speaking of the pandemic, one company that went through quite the difficult time was Restaurant Brands International (TSX: QSR). RBI stock suffered during the pandemic, as it searched for ways to bring customers in, and this ended up helping it in the long run.
RBI stock now has several methods of bringing their foods to clients and has expanded its own loyalty programs as well. Higher prices and more customer traffic sent RBI stock to profits during its latest quarter.
Shares have now rebounded significantly, up 47% in the last year and 11% year to date. With easier and easier ways of bringing in new clients, and further global expansion, it looks like RBI stock should continue to rise.
A&W Royalty
Sometimes, we just want predictability and security. And that’s exactly what you can look forward to with A&W Revenue Royalties Income Fund (TSX: AW.UN). This fund provides predictability, as it takes the same number of franchisees and locations on a regular basis. These royalties allow for predictable cash flow and therefore a stable amount of growth.
The fund currently has a 5.2% dividend yield as well for investors, which is well supported through this predictable income. Yet shares are down 7.7% in the last year, rising 4.5% year to date. That makes now a potentially great opportunity to bring in a high dividend at a great price and look forward to further growth in the near future.
Bottom line
All three of these food stocks offer growth, stability, and dividends. They’ve provided investors with solid growth in the last few years and some over the last few decades. Yet they still trade in value territory or at least are down compared to all-time highs. That is why it’s a great time to consider these food stocks before the next bull market.
Now, who’s hungry?
