However, finding companies that possess elements of all three key factors may be better suited to weathering market cycles. In good times, these companies will be able to grow and at least match the performance of the broader market indices. In declining markets, such companies with defensive business models will be able to weather the coming storm.
Here are three Canadian stocks that I think have the best mix of growth, return and value right now.
Fortis
Fortis (TSX:FTS) remains a top pick of mine for investors looking for solid long-term growth, dividend, and value numbers.
The Canadian utility giant has experienced remarkable share price growth over the past five years, as shown in the chart above. Much of that recent growth has to do with the fact that the company’s revenue and earnings per share are expected to rise rapidly in the coming years as prices for electricity and natural gas services rise.
Some of this is related to the electrification trends that have been underway for some time. But the overarching impetus for this wave is related to AI and the expected growing demand for electricity over time.
That said, I’d argue that Fortis’ position as dividend king will likely be more important to investors over time. In my opinion, Fortis is among the lowest beta and highest upside picks in the current market, and I’ll stick with that view until something drastically changes.
Restaurant brands
As for defensive Canadian stocks worth buying right now, I’d have to bet Restaurant brands (TSX:QSR) at the top of every stock watch list.
The parent company of Tim Hortons, Burger King, Popeyes, and other fantastic fast food chains has had solid growth in the past, but the company’s stock price hasn’t really kept up with its higher earnings profile. So this is a stock that is valued much cheaper on a multiple basis than it was five years ago, while continuing to produce strong results over this period.
With a dividend yield of over 3% and a growth profile that I expect to deliver mid to high single digits over time, this is a stock that I believe can deliver 10% annualized returns over the most long term. Personally, that’s enough for my own wallet.
Food Couche-Tard
Last but certainly not least on this list of Canadian total return stocks to buy is Food Couche-Tard (TSX:ATD).
The supermarket and gas station operator’s shares have stagnated somewhat in recent years, which means that the case I have for a stock like Restaurant Brands is also illustrated by this name.
Couche-Tard has continued to grow over time using an acquisition strategy. Couche-Tard has bought up small chains and mom-and-pop operators around the world and has quietly become one of the largest global players in gas stations and convenience stores.
Despite this fact, deal growth has slowed, making this stock one that growth-seeking investors have largely pushed aside in favor of companies with stronger catalysts.
That said, I’d say that if growth in the AI sector slows and long-term investors look for more defensive growth stocks, Couche-Tard and its 1.1% dividend yield could look attractive. This is a stock I would buy and hold for the long term, accumulating more during this recent dip.
#Growth #return #stocks