The Canadian stock market has been an interesting place for investors over the course of the past year. Many of the country’s top stocks have performed relatively well, all things considered. Tariff uncertainty has ravaged certain sectors, but there do happen to be a number of companies that have bucked this trend.
But overall, it’s true that most Canadian stocks are trading well off their peaks. What does that mean? Well, for those who are willing to hunt for deals, there are some sales of high-quality value stocks worth considering right now.
Here are two of my top ideas in this current market that I think are worth considering.
Source: Getty Images
Shopify
Shopify (TSX: SHOP) is Canada’s pre-eminent tech darling. One of the most impressive growth stocks we’ve seen come out of Canada in some time, Shopify benefited from a surge in interest in the e-commerce sector around the time of the pandemic.
Unfortunately, as investors can see from the chart above, this is a company that’s since traded well off its pandemic highs. There’s still a long way to go for Shopify to regain its previous valuation, but that means there’s also plenty of upside potential there for investors who don’t think this company’s previous ascent was a fluke.
Of course, I’m not suggesting that e-commerce activity will surge back to pandemic-era levels. However, I think Shopify’s underlying growth (which remains strong, given its size) and the company’s position in the global e-commerce space, in combination with Shopify’s impressive market share, make this a stock worth considering on its most recent dip.
Restaurant Brands
Restaurant Brands (TSX: QSR) is another top Canadian stock I’ve been bullish on for a long time and one that’s generally gone up and to the right in recent years.
However, as the chart above shows, this is a stock that’s down roughly 20% from its high, making QSR stock an attractive choice in my books for value investors looking for strong total returns over the long haul.
Restaurant Brands’s business model, which revolves around its fast-food offerings from Burger King to Tim Hortons, Popeyes, Firehouse Subs, and other banners, remains steady during most market environments. In fact, during previous recessions, we’ve seen sales and profit continue to increase for fast-food operators, making this company one of the more defensive picks for investors seeking safe harbour in this current environment.
In my view, Restaurant Brands’s long-term growth upside paired with this stock’s 3.9% yield provides about as attractive of a long-term total return profile as there is in the market. Thus, I think long-term investors can buy this recent 20% dip with confidence and hold for the long term. Worst case, over the near term, investors are banking on a nearly 4% yield, so they can reinvest in this stock and watch it grow over time. That’s not bad, in my view.
