If you’re a long-term investor who thinks in terms of years and decades instead of days and weeks or months and quarters, you might be interested in some of the Canadian stocks worthy of a semi-permanent spot in your TFSA (Tax-Free Savings Account) or RRSP (Registered Retirement Savings Plan). To hold onto such a stock indefinitely is not only less common these days, but it also accompanies its own slate of risks. Of course, putting in enough due diligence beforehand can shoot down some of these risks.
Most notably, focusing on companies with wide economic moats might allow firms to maintain their economic edge over time. In the age of AI disruption (just look at what happened to the world of software after the reaction to Anthropic’s new innovations), moats might not be as wide as they used to be, especially as AI and robotics become more capable at automating roles, driving efficiencies, and perhaps disrupting entire business models.
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Is AI disruption making it harder to think super-long-term about your investments?
As AI continues to be the force, I think it’s worth keeping tabs on all the long-term holdings in your TFSA or elsewhere. Today, some businesses, like the miners, probably aren’t going to be disrupted by the rise of AI agents overnight.
Indeed, AI can’t unearth precious metals on its own in an optimal fashion, at least not quite yet. But even if robots did start doing more of the heavy lifting, blasting, and drilling, I’d argue that AI is a huge positive for the mining industry rather than a negative.
Either way, the longer-term impact of AI is worth thinking about when going on the hunt for a stock you’re willing to hang onto for decades. To put it simply, the widths of moats can change, and that change might happen sooner when you throw in revolutionary new technologies. So, even if you’re betting on a low-tech play, staying in the know regarding technological developments, I think, is still a must.
The restaurant plays have juicy dividends
Regarding the names that I’m positive about for the long run, I like the fast-food players such as Restaurant Brands International (TSX:QSR) or even MTY Food Group (TSX:MTY). One thing that AI and new tech can do is make fast food even faster. Whether we’re talking about robots in the kitchen, autonomous delivery, or anything else, I’d argue that quick-serve restaurants stand to enjoy heftier margins over time as more friction is removed from the whole ordering process.
In any case, Restaurant Brands is already doing quite well with its chains of late, even without the big AI tailwinds hitting its business. Food court staple MTY Food Group has been under pressure in recent months, but as long as people continue going to malls, MTY probably won’t see its moat upended anytime soon.
The restaurant business might be increasingly competitive, but, for the most part, I view the industry as a good place to be if you’re looking for great dividends, insulation from AI disruption, and a decent value. Today, MTY yields 3.8% while trading at a ridiculous 7.4 times trailing price-to-earnings (P/E). That’s cheap for a dividend grower behind all the tasty food court brands at your favourite mall.
As for QSR, the firm behind Tim Hortons and Burger King yields 3.6%. Though shares are considerably pricier at 27.4 times trailing P/E. Either way, both names are standout “buy and forget” kinds of names perfect for the core of a TFSA.
