Canadian investors should be on the hunt for great deals as the markets look to wobble after a fairly robust start to the year. Undoubtedly, it’s generative artificial intelligence (AI) that’s in the driver’s seat again, helping power new highs for a wide range of firms, including those outside of the AI chip scene.
Indeed, many folks may be inclined to call a top in the high-flying AI stocks. While their runs could be pared in a vicious fashion, I don’t think that investors should worry that such a bust will drag down the broader stock markets.
Here in Canada, there are still deeply discounted stocks that may be a little rattled by turbulence generated by a corner in the tech scene. In any case, such a tech-driven bust may actually be an opportunity for long-term investors to buy more shares of their favourite firms on a dip. Additionally, count me as unshocked if a tech rout causes a subtle rotation out of growth and back into value.
Indeed, interest rates are likely headed lower as we inch into the second half of 2024. Canada’s inflation rate was rather tame during the reveal around a week ago.
How tame? Enough that PM Justin Trudeau has hopes that rates could be reduced sooner rather than later. Only time will tell where rates head over the coming months, but lower rates should help act as a support for a wide range of firms, especially those that sport higher growth rates or dividend yields.
In this piece, we’ll check out one great stock that I think is primed for a bull run as more investors think about value while a potential tailwind of lower rates looks to kick in over the coming quarters.
Restaurant Brands International
Restaurant Brands International (TSX:QSR) has made a glorious comeback, thanks in part to smart management moves to bring out the value behind the firm’s robust brands. Not only are changes over at Burger King helping lift the tides over at QSR, but Tim Hortons also seems to be doing quite well.
Undoubtedly, Restaurant Bands used to be a tale of “cost cuts.” Sure, cost cuts can unlock huge value for shareholders, but when it comes to the fast-food scene, I believe you’ve got to invest in long-term growth to maximize long-term shareholder value.
The company has moved on from cost cuts with a commitment to improve the overall customer experience via store modernization, investments in tech, and menu innovation. The Restaurant Brands story looks that much more interesting when you see that the stock is primed for a breakout above its all-time highs.
Indeed, QSR stock looks like a magnificent Canadian dividend stock that has plenty of growth promise.
My takeaway on the stock?
Don’t sleep on the name as we move into year’s end. I think the recent run is warranted and could be the start of a sustained move towards $125 per share. With a nice 3% dividend yield and a plan to have 40,000 restaurants and $60 billion in sales by 2028, QSR stock suddenly became the must-have value/growth play on the Canadian markets.
