Dividend Investors: 5 Stocks to Buy and Hold Forever

Dividend stocks like the Bank of Montreal (TSX:BMO)(NYSE:BMO), the Bank of Nova Scotia (TSX:BNS)(NYSE:BNS), and the Canadian National Railway Company (TSX:CNR)(NYSE:CNI) all deserve a spot in any income portfolio.

If you like complicated trading strategies with fancy charts, or exotic mining companies searching for gold in the Congo, then dividend investing is not for you.

But if you prefer good old-fashioned businesses and are willing to trade being the talk of your next cocktail party for common sense investing, then you’ll like this strategy just fine.

Investing doesn’t have to be complicated. Buy a few good businesses, reinvest the dividends, and hold on for the long haul. Today thousands of ordinary investors are using this method to grow their wealth.

So, to help get you started, I have listed five stocks that you could literally hold for the rest of your life. Of course, there are no guarantees when it comes to investing.  However, these wonderful businesses are built to last and pay a nice dividend to boot.

Stock Current Yield Market Cap
Bank of Nova Scotia 4.2% $79.1 billion
Canadian National Railway Company 1.7% $59.4 billion
Bank of Montreal 4.3% $49.7 billion
BCE Inc. 4.8% $46.0 billion
Brookfield Infrastructure Partners L.P. 3.9% $8.9 billion

Source: Yahoo! Finance

Let’s say a few words about these companies.

Canadian banks are the perfect example of wonderful businesses. Despite grumbling about fees, most customers are happy with their banks…or at least satisfied enough to stay with them. As financial firms begin offering more services, customers are increasingly tied to one lender.

As a result, companies like the Bank of Montreal (TSX: BMO)(NYSE: BMO) and the Bank of Nova Scotia (TSX: BNS)(NYSE: BNS) can easily pass on higher prices. Needless to say, most of those profits are funneled right back to shareholders.

In the same way moats protected medieval castles from attackers, an economic moat protects a business from competition. The Canadian National Railway Company (TSX: CNR)(NYSE: CNI) has a moat more than a mile wide filled with angry mutant sharks.

The company’s network of track would costs tens of billions of dollars to replicate. Furthermore, no other method of transportation can compete with rail over long distances. This competitive advantage has allowed CN to generate oversized profits year after year.

BCE Inc. (TSX: BCE)(NYSE: BCE), too, has a wide moat. Thanks to its sheer size, the company has an enormous scale advantage and network superiority. Given that BCE has paid an uninterrupted dividend for 133 years, shareholders can likely count on those steady distributions (and overpriced cell phone bills) for decades to come.

Finally, Brookfield Infrastructure Partners L.P. (TSE:BIP.UN)(NYSE: BIP) is one of the market’s best-kept secrets. The partnership owns ports in Europe, railways in Australia, toll roads in South America, and utilities throughout Canada and the United States. These are irreplaceable assets, which means they can extract tall profits from the marketplace.

Fool contributor Robert Baillieul has no position in any stocks mentioned. David Gardner owns shares of Canadian National Railway. The Motley Fool owns shares of Canadian National Railway. Canadian National Railway is a recommendation of Stock Advisor Canada.

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