I’m going to be looking to deploy some capital into my Registered Retirement Savings Plan (RRSP) next month, so I thought I’d do a piece highlighting two stocks that are top of my list to add to in the coming month. These companies are top dividend stocks with long-term growth profiles that align with my expectations of above-market total returns. That’s really my core criteria for which stocks can make it into the RRSP and which ones I think are important for all investors to consider.
Here’s why I’m looking at adding these top two Canadian stocks to my RRSP this month.
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Restaurant Brands
Restaurant Brands (TSX: QSR) is one of the world’s largest quick-service restaurants, with over 30,000 fast-food outlets in more than 120 countries. It is home to four of the world’s most popular brands: Tim Hortons, Burger King, Firehouse Subs, and Popeyes Louisiana Kitchen.
Each brand that Restaurant Brands International operates is unique, with different menus, customer sets, franchisees, and communities over decades. Restaurants are very popular for quick, affordable meals at prices equal to or less than others. A large international network of franchisees operates these stores.
Despite short-term headwinds, Restaurant Brands’s management is expected to be optimistic about the future. First, the restaurant chain has acquired Carrols Restaurant Group and Popeyes China, whose income will be added to the brand’s balance sheet from next quarter. It is also working on various operational improvements.
However, Restaurant Brands is retooling in its entirety the U.S. Burger King segment under its “Reclaim the Fame” strategy, rolled out in 2022. To date, it has funded $85 million in digital ads, high-quality remodels, and kitchen equipment through the second quarter (Q2) of FY25. The effectiveness of all this is bound to increase the profit margins of Restaurant Brands International and returns for investors.
Enbridge
Enbridge (TSX: ENB) is one of the world’s multinational energy companies based in Canada. Its business is mainly focused on oil and natural gas transportation and distribution. The infrastructure for such operations is very massive, which ensures that the company assumes a leadership position in the business.
Its high-yielding dividend is based on an extremely sustainable foundation. The security of cost-of-service or contracted assets drives the stability and predictability of roughly 98% of its EBITDA. Moreover, Enbridge has met its annual financial guidance for 18 consecutive years.
Enbridge has consistently increased its size by diversifying its business portfolio in order to capitalize on the rising demand for energy. For the corporation, investments in organic and acquisition expansion have totalled billions of dollars. The third and last acquisition of a gas utility from Dominion was just completed. Its chances for expansion and diversification were improved by the accretive purchase.
Through at least 2027, the U.S. gas utilities must increase their rate base by 8% compound annual growth, helped in part by a commitment to invest US$3.7 billion over the following three years. Enbridge offers the chance to benefit from a moderate increase in stock price as well as an alluring revenue stream.
