The pandemic has caused enormous volatility in the stock markets over the past year. Indeed, specific stocks exploded incredibly in a relatively short period of time.
However, some companies have held up better than others. And in this rather overvalued market, investors may be more inclined to pick the bigger and better stocks right now.
Against this backdrop, these two picks are some of the best stocks in Canada right now – at least for long-term investors.
Accordingly, let’s take a look!
Restaurant brands (TSX: QSR) (NYSE: QSR) continues to be on my list of choices for a reason.
This fast food supplier hasn’t quite made it past its pre-pandemic heights. It remains reasonably priced for a reason.
The pandemic has hit Restaurant Brands hard, compared to its peers. Pandemic restrictions have held back the growth of the company’s Tim Hortons banner the most. Indeed, Tim Hortons has been lagging behind for restaurant brands lately, and many investors have apparently pulled out of this growing stock lately.
But not so fast.
With the pandemic (hopefully) coming to an end soon, there’s a lot to like about the outlook for Restaurant Brands. This title remains today one of the best reopening games for those who believe in the long term growth potential of the company.
Longer term, I expect restaurant brands to continue to do well. Recent relatively strong results bear witness to the impact of the reopening of the pandemic on income. The company reported a 3% and 13% year-over-year increase in revenue and adjusted net income, respectively. It’s certainly not great, but not bad either.
I think the quarters ahead look a lot brighter for Restaurant Brands. This is a stock that should be on every long-term investor’s watch list right now.
Royal Bank of Canada
With regard to the major Canadian banks, Royal Bank of Canada (TSX: RY) (NYSE: RY) remains one of the best.
Royal Bank is a financial giant, both in Canada and abroad. It is one of the stocks of choice for long-term investors, and for good reason. The reliable payout of dividends and growth in earnings per share of Royal Bank provides incredibly consistent long-term returns for investors. In addition, the company has various sources of income. Unlike some of its retail-focused peers, Royal Bank’s strong financial markets and wealth management division elevates this title above its peers.
Almost 45% of Royal Bank’s profits come from its personal and business loans. While Royal Bank derives about 25% and 26% of the wealth management and insurance business, almost 4% comes from treasury services. In addition, these income streams are well diversified geographically. About a quarter of the bank’s business in the United States, with about 58% of Royal Bank lending in Canada. This is ideal for long term investors looking for diversification.
Royal Bank offers investors a solid 3.5% dividend yield and remains a great idea for any long-term investor today.
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a premium Motley Fool service or advisor. We are Motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer, so we’re posting sometimes articles that may not conform to recommendations, rankings or other content.
Silly contributor Chris MacDonald has no position in any of the listed securities. The Motley Fool recommends RESTAURANT BRANDS INTERNATIONAL INC.