11 Best Canadian Stocks to Buy Now

"We are not headed in the right direction, and each week that passes without improvement on the business front pushes more owners to make that final decision. The more businesses that disappear, the more jobs we will lose, and the harder it will be for the economy to recover."

“The best thing about the past year is that it’s over, and the year ahead could be one of the best since the start of the century. More fiscal juice should push the economy over the second-wave hump, while the vaccine rollout will speed up the recovery, though labour markets will take much longer to heal. Although some hard-hit services industries will struggle until most of the population is inoculated (likely in the summer), the goods-producing sector will continue to expand. Recent double-digit gains in house prices and record equity markets will support household wealth and spending.”

"I think we're going to see a very significant increase in spending because people are going to be so grateful and so happy it's behind us. We can get out of our houses, go to restaurants, go out flying and travelling and so forth. So I think we'll see that pent-up demand express itself in 2021."

“Due to the suspension, we plan to increase our purchases in the market to secure uranium we need to meet our sales commitments. COVID-19 has taught us many lessons, including that the pandemic is a greater risk to uranium supply than to uranium demand.”

“Franco-Nevada is a Canadian gold-focused royalty and streaming company, although it acquires royalties in other commodities as well, including silver, copper, oil and gas. It does not operate mines itself, but rather, collects royalties from mining companies or purchases future gold production at pre-arranged prices, in exchange for providing investment capital. Those prices represent a discounted present value of future years’ production, established by using an interest rate negotiated between the miner and Franco-Nevada. It can be startling to read that a typical contract might give Franco-Nevada the right to purchase gold at perhaps as low as one-third of current prices. It is clear both from per-ounce prices for new gold and silver contracts announced, as well as from the rate of book value expansion, that these are double-digit rates of interest, perhaps in the 12% to 15% range. The deep discount relative to current pricesis simply a reflection of the power of compounding over, say, a 20-year period or longer and brought forward to the present. Franco-Nevada earns that discount over time and is a consistent generator of return of equity (ROE).

This business model is unusually attractive. Royalty companies are among the highest-margin businesses of scale that exist, in that there is very little operating expense. General & Administrative expenses are only a few percent of revenue, and the contracts produce copious amounts of free cash flow, which are reinvested in additional royalty contracts or paid out as dividends – the company has increased its dividend every year since its initial public offering in 2007. The business model also requires little debt, thereby minimizing the financial risk. Since its inception, the shares have produced a total compound return of approximately 16% per annum even as gold prices have languished and gold mining companies have declined. Moreover, the company outperformed the S&P 500 by roughly a 4:1 margin during that time. This occurred despite a weak pricing environment for gold and silver.

The company is the beneficiary when its investees increase production, as well as when gold prices rise. However, it is not directly impacted by cost inflation, as the expenses are borne by the operators, not directly by Franco-Nevada. Similarly, the company is not encumbered with risks that are normally faced by mining companies, such as increased personnel costs, exploration and development expense, and mine reclamation or remediation. The latter is important, as these costs are difficult to predict and can be quite costly in severe cases.

In the past 10 years, the annual volume of gold-equivalent ounces the company has sold under royalty agreements has increased from 110.3 million ounces to 497.7 million ounces, or almost fivefold. Yet, of the 376 royalty properties that comprise its asset portfolio, only 107 are producing. The remaining properties may be thought of as a dormant asset. As such, there is an enormous amount of upside potential when these properties start production…”

“Restaurant Brands’ second quarter results continue to highlight our thesis that its royalty-based franchise model is a uniquely valuable business with significant long-term, global unit-growth opportunities. QSR reported strong overall same-store sales growth led by nearly 4% at Burger King, 3% at Popeyes and almost 1% at Tim Hortons. The strength in same-store sales at Burger King was driven by impressive results in the international business, which will be enhanced by accelerated growth in the U.S. business due to the recent launch of the plant-based Impossible Whopper, and its new partnership with UberEats.

Results at Tim Hortons improved from last quarter, but remain below our long-term expectations. We anticipate that momentum generated by the recently launched loyalty program has provided Tim Hortons with valuable customer insights that will help deliver improved results over time.

QSR grew net units by 5% this quarter, with 6% growth at Burger King and Popeyes, and 2% at Tim Hortons. The company announced a master franchise agreement to open 1,500 new Popeyes restaurants in China over the next decade, new units that would represent 50% of the brand’s current store base. As a result of solid same-store sales and continued unit growth, QSR’s pre-tax operating income before currency effects grew 6%, led by 10% growth at Burger King and mid-single-digit growth at Tim Hortons and Popeyes.

QSR’s shares have appreciated 45% this year, but currently trade at less than 24 times next year’s free cash flow, which represents a discount to both intrinsic value and slower-growth franchised peers. As same-store sales momentum continues to improve, we believe that investors are likely to give credit to QSR’s long-term international growth opportunities and assign a higher valuation to its shares.”