Generate wealth and balancing risks with these 3 main TSX stocks


It will be a difficult month of November, with the potential for a complete upheaval in the markets. Extreme tension is being created by both the pandemic and the upcoming US election. But a simple long-term strategy could help investors continue to grow their wealth. Today we’ll take a look at two key stocks that investors can balance for a combination of defensiveness, dividends, and stock price growth.Restaurant Brands International (TSX: QSR) (NYSE: QSR) may not be to Warren Buffett’s liking anymore. However, he became a hit with other investors. A buying strategy that directly involves Restaurant Brands is the vaccine rally thesis. It’s the same line of thinking that sees the bright side in names Cineplex and Air Canada. And this is one of the more defensible flavors of contrarianism to emerge during the pandemic.

Balancing growth values ​​with security

Now it should also be noted that 2020 has seen Berkshire Hathaway swap names like the owner of Tim Hortons for gold. It was an insightful about-face, with plenty of choice for investors. Sitting on a huge stake Barrick Gold (TSX: ABX) (NYSE: GOLD), Buffett is playing it safe. Not that there is anything wrong with it. Indeed, gold is a primary safe haven asset – not even the bizarre events of this year have changed that.

Indeed, it is increasingly fashionable in some circles to hit Oracle’s recent move to Omaha. However, future shareholders of the umbrella fast food company should be wary. Analysts recently spoke of the destruction of capabilities. Sections of the economy are already on the ropes, with some companies already crippled – probably for good. Another period of quarantine will prolong the rot.

So while Restaurant Brands may have been able to manage through 2020, a second round of lockdowns won’t be good for its bottom line. So a dumbbell strategy might be a good choice here. The growth of the short-term recovery can be offset by long-term security with a pinch of passive income. This can be achieved in this case by combining part of Restaurant Brands’ growth potential with a gold investment.

Go for gold and add passive income

Newmont (TSX: NGT) (NYSE: NEM) fulfills a thesis on dividend-paying gold stocks while still outperforming the aforementioned Barrick, itself paying a 1.1% return. One of the key points of Newmont is that it pays a richer dividend of 1.6%. However, Newmont’s price-to-book ratio of 2.2 is now a bit higher than Barrick’s 2.18. Seeing these two stocks reach parity in this intrinsic value indicator is indicative of the huge appetite for gold stocks induced by the pandemic.

This is because Newmont’s share price performance has been somewhat better than Barrick’s over the past 12 months, which explains the steeper valuation. Having gained 53% since last fall, Barrick has been shut out by Newmont. The latter share saw its price rise by 58%.

Balancing either of these gold stocks will help balance the risk of an investment in Restaurant Brands. The combination of these two types of assets brings the richer dividend yield of 3.5% and the growth prospects of the fast food name with classic defensive play.

Crazy contributor Victoria Hetherington doesn’t have a position in any of the stocks mentioned. The Motley Fool owns shares and recommends Berkshire Hathaway (B shares). The Motley Fool recommends RESTAURANT BRANDS INTERNATIONAL INC and recommends the following options: December 2020 short calls of $ 210 on Berkshire Hathaway (B shares), January 2021 long calls on Berkshire Hathaway (B shares) and short January 2021 options sale of $ 200 on Berkshire Hathaway (B Shares).


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