2 “Boring” Stocks That Have Handily Beaten the Market – and Could Keep Doing It

Boring stocks may be, well, boring, but that’s way better than exciting stocks that dip and jump. These two market-beaters are far better.

| More on:

Investors may start out impulsively making their stock choices because it seems too exciting! You can invest in anything online, with so much research available. And that’s certainly wonderful! But if you’re getting into investing for the excitement, head to a casino instead.

Making these choices based on excitement and the potential growth of some new start up isn’t a smart move. Instead, boring stocks are a far better choice. Boring stocks provide stable, long-term returns. And those returns can bring in far more income than any exciting start up can.

So let’s look at two boring stocks that have beaten the market in 2023, and could certainly continue this trend.

The North West Company

Now retail companies shouldn’t do well during recessions. After all, consumers spend less when there are downturns. However, there are certain areas where downturns don’t matter in terms of essentials. That’s certainly the case for The North West Company (TSX:NWC).

North West stock has done well quarter after quarter because it focuses on underserved areas of Canada. It places its retail locations in underserved urban neighbourhoods, or in rural areas such as northern Ontario. So frankly, there isn’t any competition. With only one place to buy your milk, you’re not exactly going to see a downward trend in sales.

Shares of North West stock are now beating the market, up 8% versus a decline of 7% for the TSX in the last year. Year to date, NWC stock is up 9%. However, it still trades at a valuable 15.5 times earnings, and offers a 3.88% dividend yield as well.

CP stock

Another stock that could be considered boring is Canadian Pacific Railway (TSX:CP). After all, it’s just a transportation service, right? Yet, it’s these steady revenue streams from multiple sources that’s made the company so stable over the years. And that’s about to climb immensely.

After winning the bid for Kansas City Southern, CP stock is soon to become Canadian Pacific Kansas City Railway. This new company is the only railway to run from North America down to Mexico. That’s a huge win, as it can now transport Canadian oil and grains, for example, down to Mexico, and bring the cars and other resources made there along the way right back.

With little overlap before the merger, this will bring in multiple new revenue streams for CP stock. Investors have already seen shares climb steadily upwards by 9% in the last year and 4% year to date. Yet, when the merger goes public, it could send shares even higher in the short term. Yet, long-term investors will certainly want to hold out, as this responsibly managed boring stock has even more gains to make.

Bottom line

When it comes to investing, think boring. Boring stocks have long-term gains and stable revenue. These boring stocks will continue to produce that revenue no matter what owing to their share of the market. In terms of North West stock and CP stock, these two market-beating companies certainly have more gains to go.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has positions in Canadian Pacific Railway. The Motley Fool recommends Canadian Pacific Kansas City and North West. The Motley Fool has a disclosure policy.

More on Dividend Stocks

analyze data
Dividend Stocks

Here’s Why the Average TFSA for Canadians Aged 41 Isn’t Enough

The average TFSA simply isn't enough for most Canadians in their early 40s. Here's how to catch up.

Read more »

cloud computing
Dividend Stocks

Insurance Showdown: Better Buy, Great-West Life or Manulife Stock?

GWO stock and MFC stock are two of the top names in insurance, but which holds the better outlook?

Read more »

concept of real estate evaluation
Dividend Stocks

How to Earn a TFSA Paycheque Every Month and Pay No Taxes on It

Canadian REITs can turn your TFSA into a monthly paycheque machine for life. Here's how Morguard North American Residential REIT…

Read more »

A plant grows from coins.
Dividend Stocks

The Smartest Dividend-Growth Stocks to Buy With $1,000 Right Now

New dividend-growth investors should consider CN Rail (TSX:CNR) stock and another top play if they're looking to build wealth over…

Read more »

Dividend Stocks

The 3 Top Canadian Stocks to Buy With $1,000 Right Now

If you want consistent income, look to consistent dividend payers. These three stocks are some of the best in the…

Read more »

A worker gives a business presentation.
Dividend Stocks

Want a 6% Average Yield? 3 TSX Stocks to Buy Today

These stocks pay good dividends that should continue to grow.

Read more »

chart reflected in eyeglass lenses
Dividend Stocks

Is Alimentation Couche-Tard Stock a Buy for its 0.9% Dividend Yield?

Couche-Tard stock's small yield is not enticing, but its growth potential could be a wealth creator.

Read more »

Hourglass and stock price chart
Dividend Stocks

5.2% Dividend Yield! I’m Buying This TSX Stock and Holding for Decades!

With its 5.2% dividend yield, Toronto-Dominion Bank (TSX:TD) is a stock I'm eagerly buying.

Read more »