This market is one that’s been anything but smooth of late. Indeed, since central banks started hiking rates to bring down inflation, valuations of risk assets have taken a beating. Accordingly, for investors looking for TSX stocks with upside potential, a long-term view has been required for investors to hold such securities in this environment.
That said, for those with an investing time horizon of a decade or more, there are some great opportunities out there. Here’s why I think Restaurant Brands (TSX:QSR)(NYSE:QSR) and Fortis (TSX:FTS)(NYSE:FTS) are great options for investors looking for growth to consider right now.
Source: Getty Images
TSX stocks to buy for long-term growth: Restaurant Brands
Restaurant Brands is a capital-light, high-quality company that earns substantial margins via four leading quick-service restaurant banners — Firehouse Stubs, Burger Kings, Tim Hortons, and Popeyes. In terms of long-term growth, Restaurant Brands has provided relatively stable metrics outside of a pandemic, which caused this stock significant turmoil.
As Restaurant Brands grows its way through this post-pandemic environment, I think there’s a lot to like about this business long term. This is a company with its sights set on Asian markets and has a strong growth trajectory in this region. As more locations are opened, and same-store sales continue to tick higher, this is a stock I think is going to look cheap a decade from now.
In the United States, this restaurant company recently reported improved earnings, surpassing expectations. Its new chief exectuive officer said that the company is already planning to attain more sustainable growth.
Having said that, Popeyes, Burger King, and Tim Hortons continue to perform incredibly well. Their sales are up by 20% compared to pre-COVID levels.
With a dividend yield of 3.6%, investors get paid to be patient with this stock. That’s the kind of long-term holding I think is worth hanging onto right now.
Fortis
Another strong option for long-term investors to consider from a growth and dividend standpoint is Fortis. A leading Dividend Aristocrat on the TSX, Fortis has raised its dividend for nearly five decades. Accordingly, from a dividend-growth perspective, this is one of the best stocks for long-term investors to consider.
An international electric and gas utility company, Fortis powers much of the U.S., Canada, and the Caribbean. That said, a vast majority of the company’s cash flows are derived from its regulated utilities business. This is a good thing, as regulations extend high entry barriers. Additionally, Fortis is able to earn extremely consistent cash flow that the company has returned to shareholders over the years.
When it comes to fundamentals, Fortis seems to be relatively strong. The company reported earnings at par with its 2022 growth plan for the recent quarter. Its earnings for the second quarter stood at $282 million. The company also posted net earnings of $634 million on a year-on-date basis.
Over the long term, I think both TSX stocks should be worth of consideration for long-term investors.
