These 2 Stocks Belong in Every Portfolio, and They’re the Cheapest They’ve Been in Years

Restaurant Brands International (TSX:QSR) isn’t the only impressive value stock in town.

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Broader stock markets are in a bit of a tailspin once again. And though it’s not looking too bright going into year’s end, I think long-term investors should stay the course and pick up a bargain here or there rather than waiting for the dust to settle.

Indeed, markets will always be worried about something. Though the list of worries is high now, I think that focusing on individual companies rather than trying to paint a macro picture with the current slate of data makes a heck of a lot more sense. Like it or not, it’s the darkest days that tend to be the least risky times to be a net buyer of stocks and other investments. And when it’s all too bright, and other investors are willing to over-extend themselves on the risk front, the risks tend to be a whole lot higher.

Indeed, stocks do not always go up. But on the flip side, they don’t always go down, either. That’s why I’m a big fan of buying on the way down, whether it turns out we’re in a mere correction or a multi-year bear market ahead of a brutal economic downturn.

If you’re a long-term thinker, things like recessions won’t have as large an impact on your emotions. At the end of the day, you should be thinking about the next 10-15 years rather than fretting over near-term losses due to concerns that may very well be overblown by increasingly nervous investors on the Street.

In this piece, we’ll stick with the basics: two top stocks that are great long-term buys on any sustained forms of weakness. Enter shares of restaurant firm Restaurant Brands International (TSX:QSR) and wide-moat rail giant CN Rail (TSX:CNR).

Restaurant Brands International

First up, we have the fast-food firm behind Burger King, Tim Hortons, Popeyes Louisiana Kitchen, and Firehouse Subs. With QSR stock, you’re getting four strong brands in four very different food categories. That means minimal overlap as each banner looks to expand into uncharted territories. Indeed, Burger King has come a long way since it moved forward with its turnaround plan to “Reclaim the Flame.”

Moving forward, I’d look for new talent to kick things into high gear over at Tim Hortons. As for Popeyes and Firehouse Subs, each brand seems to be doing quite well at the store level. The real upside for the two growthy brands, I believe, lies in international expansion. Indeed, Popeyes is the crown jewel and one of my favourite ways to play the chicken sandwich wars.

Either way, QSR stock may be looking up, even if the rest of the markets look to its feet. The stock goes for $92 and change per share, with a 20.7 times trailing price-to-earnings multiple and a nice 3.28% dividend yield.

CN Rail

CN Rail is a pretty boring play, but it has a moat, and it will last through this period of economic weakness. At around $146 per share, shares are stuck in a correction of sorts.

A recession is never a good sign for a transport play. However, the worst of the headwinds may already lie in the rear-view mirror. The company’s last quarter was nothing to clap about. That said, the stock is getting dirt cheap at 18.8 times trailing price to earnings.

The 2.2% dividend yield is also on the high end. For such a wide-moat firm, I think the depressed multiple is quite absurd, given CN has made it through worse economic climates before, faring better than many of its peers.

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 Joey Frenette has positions in Canadian National Railway and Restaurant Brands International. The Motley Fool recommends Canadian National Railway and Restaurant Brands International. The Motley Fool has a disclosure policy.

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