Long-term investing can mean different things for different investors. For some, a long-term investing time horizon looks something like a three to five-year window. For others, this could mean a decade or even two.
I’m going to take the perspective of a very long-term investor with an investing time horizon of two decades. For those looking to put capital to work in the Canadian stock market for the next 20 years and want to identify a couple of total return growth stocks in this market to pursue, here are two I’d certainly recommend at least considering right now.
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Restaurant Brands
In this current economic climate, I think balance sheet strength and defensive characteristics are two of the key factors many investors may ignore at their own peril. Restaurant Brands (TSX:QSR) is a company that displays both.
The parent company of Tim Hortons, Burger King, and a range of other world-class banners in the fast food sector, Restaurant Brands benefits not only from the steady demand of its core base but also from continued expansion in key global markets where the company’s banners aren’t as well known.
As the company sees greater adoption globally, I think its overall same-store sales growth metrics should improve. And in its core North American markets, Restaurant Brands’s menu revamps and other initiatives to stoke sales have been doing just that.
With a solid dividend yield of 3.6% and one of the best balance sheets of its peers, there’s a lot to like about where QSR stock could be headed over the long term. This is easily one of the top long-term picks I think investors can pursue confidently (and sleep well at night owning) right now.
Fortis
Fortis (TSX:FTS) could be the stock I’ve pounded the table the most on in recent years, perhaps next to Restaurant Brands. As the chart below shows, this view has certainly paid off, with strong five-year performance driven by a number of trends.
More recently, the trend in focus has been the rise of artificial intelligence, with energy demand expected to explode. I think the analysts and market participants who price such trends aren’t wrong at all. In fact, this will likely be a key factor driving continued interest in the utilities sector as a whole moving forward.
That said, with a primary focus on the Canadian market, I’d argue that Fortis has largely flown under the radar for most investors. This is a company with a very strong market share in its core regulated markets, often acting as the sole provider of utility services in these areas.
That’s a defensive profile I like. In combination with the fact that most of the company’s revenue is generated via long-term regulated contracts, Fortis’s cash flow growth profile should be about as robust as it comes. This will allow the company’s five-decade-long dividend-growth streak to stretch to seven decades. That’s my view, anyway.
