Bull & Bear Cases for Troubled Stocks

Some well-known companies that investors love have not been rewarding lately. Are they still worth holding? We’ll break down the bull and bear cases for these major companies. Let’s get started!

You’ll Learn

Nike (NKE): The Sportswear Giant in a Slump
Nike is a consumer discretionary stock that’s iconic in branding and marketing.

Its competitive moat remains solid with strong growth potential in emerging markets and direct-to-consumer sales.

However, its shift away from big retailers has hurt relationships with stores like Foot Locker and Dick’s Sporting Goods, while fierce competition and economic cycles pose additional risks. A new CEO strategy may offer a turnaround opportunity.

Canadian Tire (CTC.A.TO): A Recession-Resistant Retailer
Canadian Tire remains a solid retailer with strong brand recognition, exclusive in-house brands, and a vast distribution network. Its diversification across SportChek and Mark’s adds resilience.

However, e-commerce competition and economic headwinds make it harder for the company to generate stock price appreciation, limiting its attractiveness as a growth play.

Starbucks (SBUX): Is the Coffee King Losing Steam?
Starbucks dominates with its massive store count and a loyal customer base of 34 million members. China’s expansion and brand strength remain substantial growth factors.

However, saturation in the U.S. market, declining mall traffic, and labor disputes add concerns. Economic downturns could also make consumers rethink their $5 coffee habits while rising competition from Luckin Coffee, McDonald’s, and QSR could limit upside potential.

Investment Theses: How to Stay on Track
Investing requires patience, but holding a losing stock for too long isn’t wise either.

Investors should continuously monitor key metrics and evaluate whether a company’s growth plan is effectively executed.

Granite REIT (GRT.UN.TO): An Industrial Play with Challenges
Granite REIT owns high-quality industrial properties benefiting from e-commerce growth. Its strong tenant base and long-term contracts provide stability.

However, its exposure to Magna, economic cycles, and rising interest charges have slowed its performance. Competing REITs like Dream Industrial and Stag face similar struggles.

PepsiCo (PEP): A Dividend King with Market Dominance
PepsiCo leads the salty snack market with brands like Lay’s, Gatorade, and Quaker Oats. Its strengths include a strong marketing presence, pricing power, and repetitive purchase patterns.

However, shifting consumer preferences toward healthier options and inflationary pressures have raised concerns.

Increased competition from Coca-Cola and Nestlé further challenges its market dominance.

Stella-Jones (SJ.TO): A Niche Materials Stock
Stella-Jones provides essential infrastructure products like railway ties and utility poles. Firm long-term contracts and pricing power create a solid moat.

However, volatility in raw material costs and potential tariffs could impact profitability. Economic slowdowns and substitution risks (e.g., concrete alternatives) add further uncertainty.

Which Stocks Are Worth Holding?
Investors must ensure that their thesis aligns with the numbers before making buy or sell decisions. Mike shares which stocks among those discussed still meet numbers expectations.

The Best Place to Find Dividend Growers with Potential

What matters when investing is your conviction.

We believe that stocks showing growing revenue, EPS, and dividend trends are the ones showing the biggest trust in their business model and future growth. This is why we only pick among them.

To help you narrow your research and focus on quality, we built the Dividend Rock Star List. The list is updated monthly and represents a great source from which to start your dividend stock hunting.

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