The 2 Most Interesting Stocks on the RBC Quant Top 40 List

Quebecor (TSX:QBR.B) and another top stock are among my favourite from RBC’s latest quant top-40 list.

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The latest Royal Bank of Canada (TSX:RY) Quant list of top 40 stocks includes a pretty intriguing line-up of well-versed plays. Indeed, it’s a pretty extensive list, and though I’m a fan of most of the companies within the batch, I’ve narrowed the list down to my personal top two for investors planning on staying invested for the next two to three years.

Indeed, it was tough to go from 40 top plays to just two. And though I would have loved to include a few more of the solid businesses within RBC’s batch, the following two, I believe, seem well-suited for a long-term investors’ market-beating portfolio. Without further ado, let’s get right into the names. Also, I’d strongly encourage readers to check out all 40 companies so that they can check out the names that made (or didn’t make) the list. Indeed, some of the inclusions may surprise you!

TD Bank

First, we have Canadian bank TD Bank (TSX:TD), which has been slogging through a rather challenging environment over the past three years. Indeed, the turnaround may still be many quarters (or even years) out. Regardless, you’re getting a fantastic 5% dividend yield from one of the best-run banks in Canada.

TD Bank’s chief executive officer (CEO) Bharat Masrani took a pay cut last year as shares of TD dragged their feet. Looking ahead, look for Masrani and his team to make up for lost time as we move from peak rates to a lower-rate world, one that could look to put its cash hoard to work, perhaps on an acquisition down south.

With a 12.6 times trailing price-to-earnings multiple, TD looks like a value play hiding in plain sight as we spring into spring!


Quebecor (TSX:QBR.B) is a rather large mid-cap or a very small large-cap ($7.1 billion market cap) regional telecom company that most non-Quebecois have never heard of. It’s a firm behind a very powerful banner in Vidéotron in its markets of interest. And though Quebecor has done relatively well by staying within its region of interest, I’d argue that it could unlock next-level growth prospects as it looks to go national.

The firm has already taken steps to expand across the nation with its pick-up of low-cost wireless carrier Freedom Mobile. The next step? Perhaps a more aggressive spending spree in next-gen telecom tech. As rates fall and Quebecor sets its sights on the market share of the Big Three telecoms, I’d look for the tables to tilt in Quebecor’s favour.

It’s a disruptor now and it could really make a dent in the telecom industry over the next five years. The stock trades at just 11.1 times trailing price-to-earnings multiple to go with a 4.16% yield.

Don’t let the latest sub-par wireless performance numbers let you miss out on the long-term opportunity at hand. I think Quebecor may very well be that number-four telecom rival that Canadians (and federal regulators) have been pounding the table on. Though it’ll be a long ride to join the Big Three, I am a fan of management and its capabilities. To me, it’s no mystery why Quebecor is on RBC’s quant top-40 list.

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 Toronto-Dominion Bank. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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