1 Canadian Stocks You’ll Probably Be Kidding Because You Won’t Own Any Stock in Ten Years

Finding unique buying opportunities in any market is what we are all looking for. There are plenty of overlooked companies, or companies that have run into trouble for one reason or another, that some investors rightly believe are worth buying in the long run.

Of course, it is a difficult task to buy stocks when they are down or when the trends are not pointing in the right direction. There will always be a certain amount of doubt in the minds of investors as the market turns.

But those with rock-solid balance sheets and consistent cash flow growth should outperform those with less clear long-term profitability prospects. Here’s one of the best Canadian stocks that I think investors will be kidding themselves for not owning in ten years.

Restaurant brands

In the world of fast food giants Restaurant brands (TSX:QSR) is a company that I think should be a top pick in this current market environment.

Unlike other US-focused peers that have surged lately as the trade-down story gathers pace, Restaurant Brands hasn’t seen the same kind of price appreciation as it has lately. What that has meant is that investors looking to buy shares of parent Tim Horton’s and Burger King can do so at about the same level as mid-2023.

Despite two years of very reasonable growth and a lot of capital returned to investors, I’d say this is a good deal. And given the company’s previous dividend increases, this means investors now have the opportunity to buy shares of this dividend stock, which delivers a dividend yield of 3.7%.

This return, combined with strong expected future growth, should lead to double-digit annual total returns over the long term. At least that’s my base case, in my own personal model.

Why is this the right time to intervene?

In my opinion, market forces are starting to favor investors who are willing to take a more defensive approach in this market.

We are all uncertain about the direction that monetary and fiscal policy will take from here. On the one hand, inflation remains a concern worldwide. On the other hand, there are questions about slowing job growth and whether the recession headwinds we are now seeing materialize will manifest into something worse down the road.

In this regard, consumers (even consumers with higher incomes) appear to be showing a downward trend. For those looking for exposure to companies with the ability to capture greater market share in such a trading environment, I’d say lower-priced dining experience providers (such as Restaurant Brands) are a great place to start.

This is a company with a solid balance sheet, a very reasonable dividend yield, and a long-term capital return profile that outperforms many other consumer discretionary stocks.

For me, Restaurant Brands is a flashy purchase at the moment.