Hockey has Wayne Gretzky. Basketball has Michael Jordan. Golf has Tiger Woods. The investing world has Warren Buffett. Legends who have become household names because of their excellence in their given field. Over the past year, investors have been eager to soak up advice from Warren Buffett. He has remained liquid as markets appear broadly overheated. However, today I want to look at three TSX stocks that fit the Buffett investing framework. Let’s dive in.
This is Warren Buffett’s Favourite TSX Stock
Last April, I’d discussed how Canadians should look to emulate Warren Buffett as the COVID-19 pandemic started to shake our world. One of the top TSX stocks that Warren Buffett has stuck with is Suncor Energy (TSX:SU)(NYSE:SU). The Calgary-based company specializes in production of synthetic crude from oil sands. It is one of the biggest energy players in Canada.
Shares of Suncor have climbed 37% in 2021 as of close on March 12. Canadian energy stocks have rebounded nicely in late 2020 and early 2021 as oil and gas prices have bounced back. The spot price of West Texas Intermediate (WTI) crude hit a 52-week high in trading over the weekend. It was last trading just above the US$66 mark.
In Q4 2020, Suncor saw funds from operations hit $1.22 billion or $0.80 per share – up from $1.16 billion or $0.76 per share in the prior year. Suncor was forced to drop its quarterly dividend to $0.21 per share in 2020, representing a 2.8% yield. Warren Buffett is well-positioned in this TSX stock as oil stages a promising comeback.
Why the Oracle of Omaha is turning to the health care sector
Warren Buffett backed away from his temporary bet on gold in the third quarter of 2020. Berkshire Hathaway didn’t stand pat. Buffett’s company poured into the health care sector with stocks like Pfizer and Merck. This came ahead of the largest vaccine rollout in history.
VieMed Healthcare (TSX:VMD)(NASDAQ:VMD) is not a player in the vaccine space. However, this TSX stock has gained traction during the COVID-19 pandemic. The company provides in-home durable medical equipment to clients who are plagued with respiratory ailments. VieMed also supplies ventilators, allowing VieMed to step into a pivotal role as the pandemic raged across North America.
The company expects that revenues will continue to see a boost during the pandemic in the first quarter of 2021. Shares of this TSX stock last had a favourable price-to-earnings ratio of 13. VieMed fits Warren Buffett’s value investing model and it is an exciting player in the health care space.
One more TSX stock that fits the Warren Buffett mold
Warren Buffett pulled away from Restaurant Brands International (TSX:QSR)(NYSE:QSR) in 2020. Few industries were hit as hard as restaurants after the pandemic hit in full force. RBI took a hit as restaurants were forced to close on the brick-and-mortar front. However, fast food establishments have had a marked advantage over their counterparts.
The company released its final batch of 2020 results on February 11. Global digital sales reached $6 billion – doubling up in home markets from the prior year. However, adjusted EBITDA was still down 18% from the prior year. Fortunately, there were signs of a rebound from its major brands in Q4 2020 as the reopening pressed on.
RBI offers a quarterly dividend of $0.53 per share, representing a 3.4% yield. Canadians should oppose Warren Buffett and snatch up this TSX stock before the spring.
Speaking of Suncor stock . . .
Should you invest $1,000 in Suncor Energy right now?
Before you consider Suncor Energy, you may want to hear this.
Motley Fool Canadian Chief Investment Advisor, Iain Butler, and his Stock Advisor Canada team just revealed what they believe are the 10 best stocks for investors to buy right now… and Suncor Energy wasn’t one of them.
The online investing service they’ve run since 2013, Motley Fool Stock Advisor Canada, has beaten the stock market by over 3X. And right now, they think there are 10 stocks that are better buys.
Learn More Today!
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- 2 Growth Stocks That Can Outperform Air Canada (TSX:AC)
Fool contributor Ambrose O’Callaghan has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares) and Viemed Healthcare Inc. The Motley Fool recommends RESTAURANT BRANDS INTERNATIONAL INC and recommends the following options: short March 2021 $225 calls on Berkshire Hathaway (B shares), short January 2023 $200 puts on Berkshire Hathaway (B shares), and long January 2023 $200 calls on Berkshire Hathaway (B shares).
The post Warren Buffett: Top 3 TSX Stocks to Buy Today appeared first on The Motley Fool Canada.