Earlier this week, the news that Pfizer’s the vaccine has been reported to be highly effective and has sent markets skyrocketing. Lot of TSX stocks have seen significant price increases, particularly those that have fallen behind in the market due to the pandemic.
Savvy investors across Canada have rightly acknowledged that this is just another great money-making opportunity in 2020. But in addition to considering retailers and airlines, many Canadians have also considered Pfizer or some of the other vaccine manufacturers.
Owning one of the pharmaceutical companies could offer investors some potential. However, I believe there may be several stocks right here on the TSX that offer investors far more benefits.
Why you should forget Pfizer
By now, most vaccine manufacturers have already seen a massive rise in stock prices since the start of the pandemic. Additionally, when the news was announced Monday and the market opened, the news of the vaccine had already been inserted into Pfizer’s share price.
Furthermore, it would still be considered a speculative purchase to invest in a pharmaceutical company strictly because it could produce the best vaccine.
We still don’t even know if the vaccine will be approved; there is no news on the safety of the vaccine. It may not even be the best choice, considering it is a two shot vaccine and must be stored in extremely cold temperatures. It is also still so early that we don’t know if it will be an annual vaccine.
There is also uncertainty about how much the vaccine will cost and what profit the company will be able to make from it, especially in third world countries.
With all these unknowns and many investors rushing from pharmaceutical companies already, there are much better choices for investors. Here are two TSX shares you can buy today instead.
Stock of the restaurant
Rather than Pfizer, investors should consider struggling firms. One of the best companies that trade at a major discount is A&W Revenue Royalties Income Fund (TSX: AW.UN).
Stocks in restaurants were some of the hardest hit by the pandemic. Fortunately for A&W, fast-service restaurants like him have had far less impact.
The biggest impact on the restaurant industry has been to dine in restaurants whose capacity was limited during the pandemic. That’s why after the initial A&W selloff, the stock has recovered strongly.
He continues to post impressive numbers as his business picks up. The stock even paid a special dividend to shareholders last month. This happened just a few months after the dividend was restored following a temporary suspension at the start of the pandemic.
Currently, the stock is trading at around 25% off its 52-week high and its dividend yields around 4%. This is an extremely attractive entry point, especially considering the strong growth A&W was achieving prior to the pandemic and the potential for its dividend to continue growing as A&W resumes business.
TSX energy stock
Another stock you might consider instead of Pfizer is Enbridge (TSX: ENB) (NYSE: ENB). Enbridge isn’t a hugely cheap stock like other struggling businesses. However, for the quality and size of the company, Enbridge’s current discount makes the stock a super easy purchase.
The energy giant is a huge company with significant competitive advantages. The company carries about a quarter of all North America’s oil and natural gas, making it critical to the continent’s economy.
Its main volumes have declined since the start of the pandemic. However, Enbridge’s impressive business can easily absorb the impact on revenues.
In fact, its operations are so solid that since the start of the pandemic, management hasn’t hesitated in its confidence that the distributable cash flow per share for 2020 will be between $ 4.50 and $ 4.80.
In its third quarter earnings report, Enbridge once again showed investors why it is such a high quality business that investors can buy and hold forever.
At the close on Thursday, Enbridge was again trading below $ 38 per share. This is extremely cheap for such a large and dominant company.
Also, earlier this year, the stock hasn’t been that cheap since 2011. Plus, with its highly stable dividend yielding over 8.5%, it’s arguably one of the best investments you can make today.
Insane contributor Daniel Da Costa owns shares in ENBRIDGE INC. The Motley Fool owns shares in and recommends Enbridge.