2 Stocks I’m Loading Up On in 2024

Restaurant Brands International (TSX:QSR) and another stock I’m pretty close to buying right here, right now.

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With the Canadian stock market within 1% of all-time highs going into summer, now seems like a pretty decent time to top up before the Bank of Canada starts to seriously consider rate cuts. Undoubtedly, the story of the week, at least in the U.S. market after Memorial Day, seems to be that the Federal Reserve rate cuts may be a tad farther into the future than originally expected by some on Wall Street.

Indeed, inflation has come down a great deal. There’s no doubt about that. However, it’s clear the Fed wants more data before it feels comfortable enough to make the first of what could be many interest rate reductions. And if inflation heats up again?

Don’t count on the Fed to put away its rate-hike button quite yet. At the end of the day, central banks can be difficult to time. Instead, I’d much rather make the most of the recent slip in stocks to take advantage of bargains.

In this piece, we’ll check out two cheap stocks I’ll likely be loading up on between now and year’s end.

Restaurant Brands International

Restaurant Brands International (TSX:QSR) is probably one of my top dividend growth picks for the summer, with shares now going for $91 and change per share after a nasty, probably unwarranted super-sized (please forgive the pun, folks!) correction in excess of 17%. Why the violent fall? The rest of the fast-food industry is in a pressure spot right now as the economy emerges from inflation while consumers are still feeling the need to cut back where possible.

More home cooking means less eating out. Moving into the summer, though, things could reverse course, and big brands such as Burger King could rise to the top again, thanks to their value menus. Recently, Burger King launched an intriguing $5 meal deal. Sadly, the $5 deal is in the States only. But in due time, who knows?

Perhaps Canadian Burger King and Tim Hortons could be next in line for value menu deals. If they arrive, the crowds will surely come. All considered, I view QSR stock as a steal at 17.3 times trailing price-to-earnings (P/E), with its 3.4% dividend yield.

TD Bank

Things have gone out of control for shares of TD Bank (TSX:TD), as fears over money-laundering penalties and regulatory roadblocks come to light. Indeed, we just do not know the magnitude of the situation or when TD can walk away from the mess.

Could it be three years before TD is granted permission to make deals south of the border again?

Who knows. Either way, the U.S. market is a major source of growth for the Canadian bank. Though a really long restriction could hurt earnings, my guess is that TD stock may not have much further to fall. They have the capital ratio to pay the penalties and more than enough dry powder to fund a massive share buyback. Perhaps it’s best that TD bought back shares at this point of severe undervaluation.

The stock’s going for $75 and change and is close to multi-year lows right now. Amid recent analyst downgrades over TD’s money-laundering overhang, I’d step in as a contrarian right here. It’s a great bank, it’s on sale, and it will find a use from cash it won’t be allowed to spend in the States, in my opinion.

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 and Toronto-Dominion Bank. The Motley Fool recommends Restaurant Brands International. The Motley Fool has a disclosure policy.

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