Canadian investors who are looking for a starting place when it comes to building out their long-term investing portfolios have come to the right place. I’ve had the pleasure of perusing hundreds of Canadian stocks over the years, and there are always a few that stand out to me as long-term winners.
The following three companies are ones I’d put in the no-brainer bucket right now. I think July is as great a time as any to start building a position in these companies.
So, before the month ends, let’s dive into why now is a great time to consider these three stocks.
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Restaurant Brands
Fast food giant Restaurant Brands (TSX: QSR) has seen relatively muted price appreciation in recent years, with the stock trading relatively flat from the same time a year ago.
That said, over the very long term, this has been a company that’s been worth holding. For Canadian investors, Restaurant Brands is most notably the parent company of Tim Horton’s. Though the firm also owns Burger King, Popeye’s, and a number of other world-class banners within its portfolio, providing relatively diversified revenue and earnings growth over time.
Now, overall top and bottom line growth has slowed in recent quarters, and there’s some turnaround efforts taking place to bring the company fully back into growth mode. That said, given the quality of Restaurant Brands’ management team and the company’s commitment to returning capital to shareholders, this remains a top pick in my books and one I’m looking to add right now.
Bank of Nova Scotia
Among the big five Canadian banks, Bank of Nova Scotia (TSX: BNS) remains one of my top picks for long-term investors to consider.
There are good reasons for this. First of all, Scotiabank is more than a Canadian bank. Yes, that’s the majority of the company’s business. But with the Canadian economy remaining on relatively strong footing, and with global growth opportunities thanks to the company’s exposure to the U.S. and Latin American markets, I think Scotiabank actually has a better growth profile than other Canadian banks.
With a 5.7% dividend yield and a stock price that has surged more than 23% over the course of the past year, this is not only a value and momentum stock, but a dividend and growth play as well. What’s not to like?
Enbridge
The North American economy, like all global economies, runs on energy. And in recent decades, energy independence has become a big trade that’s paid off for patient investors in the likes of Enbridge (TSX: ENB) and other companies serving this sector.
Enbridge continues to generate outsized cash flows tied to its core pipeline business. Delivering crude oil mainly from Western Canada’s oil sands to refiners in the U.S. Midwest, Enbridge has created about as robust a business model as a company could hope for.
Additionally, I think most of Enbridge’s value really comes from the company’s sky-high dividend yield. While Enbridge’s yield has come down considerably from near-double-digit territory not that long ago, a current yield of 6% is still enough to get most investors out of bed. Indeed, that’s a heck of a lot better than what most bonds will offer, with a risk profile I’d argue is much lower.
I wouldn’t be surprised to see Enbridge produce the kind of double-digit returns investors are after for many years (and potentially decades) to come.
