Right now is the perfect time to make portfolio adjustment for those looking to cycle into new long-term positions. This current environment is one filled with stocks with sky-high valuation multiples. Accordingly, finding great long-term core portfolio positions at reasonable prices is difficult.
However, these three stocks are ones I think fits this profile perfectly. So, let’s jump into it.
Long-term investors seeking a reasonably priced defensive gem ought to consider Fortis (TSX:FTS)(NYSE:FTS). This company continues to be one of my top picks for a number of reasons. For starters, Fortis’s long-term contracts for its regulated utilities business provides extremely stable cash flows investors can rely upon. These cash flows are reinvested into the company’s business but also paid out in the form of dividends over time.
Indeed, Fortis’s dividend-growth history is truly incredible. The company’s 3.7% dividend yield is decent in its own right. However, a track record of nearly five decades of never missing a dividend increase provides long-term investors with one of the best income growth stocks in the market today.
Barrick Gold (TSX:ABX)(NYSE:GOLD) is the second-largest mining company worldwide. Accordingly, those looking to benefit from rising gold prices have come to the right place.
Additionally, gold continues to be one of the safest places to park money for the long term. Gold miners like Barrick provide added upside for investors who believe gold prices will continue higher.
The company’s revenue growth of 30% year over year is replicable over the medium term should gold prices continue to rise. I happen to be very bullish on gold right now and think these sorts of numbers aren’t one-time events. Barrick’s cash flow growth of 197% has allowed the company to return nearly $750 million to shareholders. I expect investors looking for long-term total returns won’t go wrong with this name.
The company’s metal reserves are among the largest in the world. Those banking on a long-term winner in the mining space can’t go wrong with Barrick right now.
Canadian Apartment REIT
As far as the real estate sector goes, Canadian Apartment REIT (TSX:CAR.UN) continues to be one of my top picks. Why? Well, this residential-focused REIT operates in one of the best real estate sub-sectors investors will want access to right now.
Canadian property prices have surged, but rents haven’t necessarily kept pace with these increases. I think CAP REIT has tremendous opportunity for continued NOI growth over time.
The company’s average annual growth rate of 3.5% is better than a majority of its peers. I think this rate will increase over time, as residential property catalysts continue to get priced in over the medium term. Furthermore, I expect CAP REIT’s cash flows to continue to grow, lowering the company’s (already low) payout ratio.
There’s additional room for distribution increases on the horizon, so this is a stock I’d sit pretty with if one owns it. For those looking for top-notch REIT exposure, this is a great stock to consider today.
Like these long-term picks? Here are a few more we think will do very well over the long term:
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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 Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool recommends FORTIS INC.