Finding no-brainer stocks is easier said than done. Indeed, many of the top stocks in various categories (growth, value, income, etc.) provide just as many headwinds as tailwinds. Long-term growth catalysts are great, but if a company is prone to near-term plunges, such a capital loss could impair a portfolio for a very long time. For retirees and those who may need access to this capital, that’s not a great thing.
Thus, I’ve decided to focus on three companies with strong fundamentals and defensive attributes. These are top TSX stocks I’d put in the no-brainer bucket from the perspective of really not having to worry about these stocks over a long-term time frame. Being able to sleep well at night is a big advantage to being able to hold stocks for the long term.
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Alimentation Couche-Tard
Alimentation Couche-Tard (TSX:ATD) runs a convenience store and gas station network in various regions of North America, Asia, and Europe. The company sells more than gas, with its on-site sales of other treats and snacks providing the high-margin business that has funded its growth in the past. Investors may be most familiar with the company’s core banners, which include Ingo, Circle K, Holiday, and Mac’s brands.
Couche-Tard’s value has been driven by consolidating the rather fragmented gas station/convenience store business in key markets in Canada and the United States. However, after transitioning to other key markets, such as Europe, the company has quietly turned into a global powerhouse in this space, continuing to add a footprint and grow its profitability over time.
Currently trading at less than 19 times earnings, Couche-Tard stock is relatively attractively priced based on its historical growth trends. For those seeking long-term stability, this is a company I think is worth considering at its current valuation.
Fortis
Fortis (TSX:FTS) is another highly-defensive business worth considering. A leading North American utility company, Fortis operates 10 utility transmission and distribution assets in Canada and the United States of America. The company provides electricity and gas services to more than three million people across these two countries. It also has smaller stakes in electricity generation and several Caribbean utilities.
For the first quarter of 2024, Fortis has declared a dividend of $0.30 per share, which will be distributed on March 1. Overall, the company is a no-brainer investment option from an income standpoint due to its long-term dividend-growth profile (annual dividend increases for more than five decades). Readers will know I continue to pound the table on this name despite its rather sideways price action in recent years. That’s mostly due to the company’s value as a bond proxy, with a current yield of 4.4% that’s only likely to grow over time.
Restaurant Brands
Restaurant Brands (TSX:QSR) is one of the largest fast-food conglomerates in the world, achieving $35 billion in sales in 2021. It operates in more than 100 countries and generates revenues from its company-owned restaurants, franchised stores, royalty fees, and the famous Tim Hortons.
Restaurant Brands International will release its fourth-quarter and full-year 2023 financial results on February 13. Ahead of these earnings, the stock has been rising and currently trades near its all-time high. Much of this valuation increase is due to previous strong results and the company’s defensive business model, which could actually see an uptick in interest on recessionary pressures as consumers trade down in terms of their dining preferences.
