1 Colossal Growth Stock to Buy Before a Big Bull Rally

Restaurant Brands International (TSX:QSR) stock is a growth play that may be too cheap to ignore in August 2023.

| More on:
dividends grow over time

Source: Getty Images

The new bull market in the S&P 500 caught many overly pessimistic investors off guard when it kicked off in the back half of last year. Undoubtedly, it was not easy to be a buyer, with interest rates surging higher while concerns of a central bank-induced recession dominated the headlines. Earnings weren’t stellar, and it was becoming harder to justify valuations following the 2020-21 market surge.

These days, the bull seems to be incredibly strong, with the hardest-hit stocks of 2022 now up by considerable amounts. Doubt the sustainability of the current bull market, if you will, but I think it has legs to move higher in the second half, even though the pace may be a tad slower. Perhaps a stock market correction may hit at some point.

Regardless, Canadian investors shouldn’t look to avoid corrections, as they tend to hit when we expect it least! Instead, be prepared for markets to continue acting in unpredictable ways. Can a correction hit tomorrow? Sure, but can it continue moving higher before the next local peak? That’s also a possibility.

New investors: Don’t wait for the bull market to fall before getting started investing

So, instead of trying to time the market or pay too much attention to the state of the economy and what strategists see next for the TSX Index or S&P 500 over the short term, it seems wise to analyze stocks as though they are individual pieces of companies. Even if consumer spending takes a shot to the chin, not all companies are bound to fall accordingly. Some are better equipped to adapt to tough times than others. And some may even treat an economic downfall as an opportunity to gain ground over market rivals!

In this piece, we’ll check out two impressive growth stocks that I think could move higher as the bull run extends over the next 18 months. And if there’s a correction or bear market that catches investors off guard? Bright contrarians will be ready to buy even more shares at lower prices. If anything, investors should hope for such a pullback if they’re young or have excess liquidity lying around!

Restaurant Brands International

Restaurant Brands International (TSX:QSR) is a quick-serve restaurant company on the verge of a multi-year breakout. Today, shares are just over $100 per share, just about 4% away from its high not seen since August 2019. Though inflation and macro headwinds, QSR stock is fresh off one of its most pronounced rallies in recent memory. The stock’s up over 60% from its 2022 lows, and I think there’s more room to run, even if we encounter a recession over the next 12 months.

The company’s growth-focused investments are paying off. And I don’t expect management to take its foot off the pedal. Not with a strong quarter in the books for Burger King and its other brands. With a 2.9% dividend yield and a plan to grow over time, count me as a buyer of QSR on any dips. It’s growth that will be tough to derail!

The bottom line

Restaurant Brands has been one of the hottest TSX-traded fast-food stocks over the past year. Management is getting it right, and investors are being rewarded. Even with a recession, I find it hard to pass up on the fast-food gem right now while it gets its brands back on the growth track.

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 Joey Frenette has positions in Restaurant Brands International. The Motley Fool recommends Restaurant Brands International. The Motley Fool has a disclosure policy.

More on Investing

ETF stands for Exchange Traded Fund
Investing

2 High-Yield Dividend ETFs to Buy to Generate Passive Income

Both of these Hamilton ETFs sport double-digit yields with monthly payouts.

Read more »

engineer at wind farm
Energy Stocks

1 Canadian Utility Stock to Buy for Big Total Returns

Let's dive into why Fortis (TSX:FTS) remains a top utility stock long-term investors may want to consider right now.

Read more »

man in suit looks at a computer with an anxious expression
Tech Stocks

Short-Selling on the TSX: The Stocks Investors Are Betting Against

High-risk investors engage in short-selling, betting against some TSX stocks for bigger profits.

Read more »

woman retiree on computer
Dividend Stocks

1 Reliable Dividend Stock for the Ultimate Retirement Income Stream

This TSX stock has given investors a dividend increase every year for decades.

Read more »

A glass jar resting on its side with Canadian banknotes and change inside.
Stocks for Beginners

How to Grow Your TFSA Well Past the Average

Need to catch up quick with your TFSA? Consider some regular contributions to this top bank stock, as well as…

Read more »

dividend growth for passive income
Investing

Key Canadian Stocks for a Wealth-Building 2025

These three Canadian stocks could outperform next year, given their solid underlying businesses and healthy growth prospects.

Read more »

Tractor spraying a field of wheat
Metals and Mining Stocks

Where Will Nutrien Stock Be in 1 Year?

Nutrien stock has had a rough few years, and this next year may not be easy. But long-term investors may…

Read more »

Canadian dollars in a magnifying glass
Energy Stocks

The Smartest Energy Stocks to Buy With $200 Right Now

The market is full of great growth and income stocks. Here's a look at two of the smartest energy stocks…

Read more »