It’s been a somewhat mixed new year for stocks thus far, with the first week bringing worth a jolt of bearishness before settling (at least for the most part) in the second week. Indeed, it’ll be interesting to see where stocks go from here as various market strategists offer their differing views for the new year. As is typical, we have a tug-of-war between the bulls and the bears. Who will win out? That’ll be a surprise, as always!
For investors, it can pay dividends to pay less merit to those shallow near-term market predictions. At the end of the day, nobody knows where the market is heading tomorrow, next week, or even the next month. What we do know is markets tend to go higher over the long term (think over the span of many years). And if you’re a young investor looking to get paid to invest for the next 10 years and beyond, you don’t need to overreact to a hot or cold market.
In fact, you can maybe add to a position on weakness and just wait things out when stocks get a tad ahead of themselves. Heck, you may even wish to trim if the market price of a stock you hold has surged well above your projection of its true worth (or intrinsic value).
As it stands, I believe markets aren’t cheap or expensive. Sure, 2023 was a magnificent year for stocks. But with the broader S&P 500 barely nudging past all-time highs and the TSX Index still more than 4% from its own high, I’d argue there’s still value out there if you know where to look!
In this piece, we’ll look at two stocks that I believe offer value, dividends, and defensive traits that could pay off big time should Canada’s economy fall into a recession in 2024.
Restaurant Brands International
Restaurant Brands International (TSX: QSR) recently flirted with new all-time highs at around $105 and change. It’s a breakout that has been years in the making, and though shares retreated over 1% on Monday’s quiet session of trade, I believe QSR stock is a great buy to play the breakout. Indeed, QSR stock has been under pressure for many years prior to mid-2022. With smart managers learning the ropes in the high-growth fast-food world, I believe QSR could make up for lost time in 2024.
With a new “International” segment and four brands with explosive international potential (Burger King, Tim Hortons, Popeyes Louisiana Kitchen, and Firehouse Subs), I view QSR stock as a stealth growth play priced as a value play. At 26.8 times trailing price-to-earnings and a 2.79% dividend yield, QSR stock stands out as a gem hiding in plain sight.
McDonald’s
McDonald’s (NYSE: MCD) stock is also close to new heights, with shares hovering just south of the $300 level. Undoubtedly, many analysts view McDonald’s stock as a great buy for the new year. Whether or not we encounter a recession, McDonald’s is a leader that has the tools to continue steering the broader industry into new waters.
I’m a big fan of the golden arches and the juicy 2.28% dividend yield. Additionally, the stock isn’t all too expensive, given it’s one of the bluest blue chips out there! The stock trades at 25.9 times trailing price to earnings. It’s not a deep value, but it’s a great long-term play, nonetheless.
