2 of the Best TSX Stocks to Buy in August

Here’s why Fortis (TSX:FTS) and Restaurant Brands (TSX:QSR) are two of the top TSX stocks investors may want to consider right now.

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For investors looking to dominate the market in August, finding the Best TSX Stocks to buy and load up on during downturns is a great idea.

Truth be told, most Canadian stocks have had a relatively strong year, with a number of defensive plays and companies providing meaningful dividend income seeing recent surges, alongside declining interest rates. I think that trend could continue, and the two companies on this list certainly represent solid plays from an income perspective.

For those looking for defensive exposure, dividend income, and solid long-term growth and value, these are three top TSX stocks to consider right now.

Fortis

Fortis (TSX:FTS) owns and operates 10 utility transmission and distribution assets in the United States and Canada. The company serves more than 3.4 million customers in the region and owns smaller stakes in electricity generation and multiple Caribbean utilities. The utilities giant has created an impressive recurring revenue stream, providing cash flow stability that’s simply hard to find in today’s market. 

Created with Highcharts 11.4.3Fortis PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

Fortis recently released its financials for the second quarter of 2024, which showed a net earnings per share increase from US$0.62 to US$0.67. This earnings growth (which has actually grown by around 5% per year in recent years) is expected to continue as the company continues to add new customers and stands ready to apply for rate increases over time.

Indeed, utilities companies like Fortis provide essential services. That’s not debatable. Those who don’t want their A/C units going out in the summer and want to heat their homes in the winter (particularly in the Canadian market) have to pay their bills. Thus, no matter how stretched the consumer may be (and how that may impact other stocks), Fortis won’t feel the same strain in a down market.

For investors seeking a company with a 4% dividend yield and a proven track record of raising dividends for more than five decades in a row, Fortis certainly seems like a strong pick. The company’s five-year capital outlook suggested dividends should continue to grow in the 4% to 6% range long term. That’s good enough for me.

Restaurant Brands

Restaurant Brands (TSX:QSR) is one of the largest restaurant companies globally, generating more than $35 billion in system-wide sales in 2021. The company operates more than 28,000 restaurants in 100 countries and owns the famous Burger King, Popeyes Louisiana Kitchen, Firehouse Subs and Tim Hortons. 

Created with Highcharts 11.4.3Restaurant Brands International PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

In the first quarter of 2024, Restaurant Brands reported its consolidated comparable sales increased by 4.6%. Moreover, the company’s net restaurant total grew by 3.9% year-over-year. This expansion of organic sales while at the same time adding to the company’s footprint has clearly been a winning strategy. A look at the company’s stock chart above tells a rather promising story.

Now, Restaurant Brands’s stock price has taken a hit of late. That’s despite some strong year-over-year net income growth this past quarter (from $477 million to $544 million) driven by the aforementioned factors.

As Restaurant Brands continues to grow its cash flow over time and manages its payout ratio well, I think this 3.3% yielding stock is one long-term investors will certainly want to consider.

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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 Chris MacDonald has positions in Restaurant Brands International. The Motley Fool recommends Fortis and Restaurant Brands International. The Motley Fool has a disclosure policy.

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