Boring Is Better: 2 Unexciting Stocks That Will Provide Fantastic Returns

Power Financial Corp. (TSX:PWF), and Royal Bank of Canada (TSX:RY)(NYSE:RY) are two companies investors can buy and hold forever.

When it comes to investing, it’s easy to get caught up in the market hype and buy stocks from initial public offerings or emerging industries. However, it’s just as easy to get burned and lose significant money when investors listen to the “market noise.”

Here at the Fool, we try to maintain a long-term view and don’t let the day-to-day market swings impact our decisions. We like to buy fantastic companies with strong business fundamentals in industries of need. These types of companies tend to be boring, but their returns over the long term can be astounding!

Power Financial Corp. (TSX:PWF), and Royal Bank of Canada (TSX: RY)(NYSE: RY) are two companies investors can rely on for solid returns for years to come.

Power Financial Corp.

Power is the holding company for great businesses such as Great-West Lifeco Inc., IGM Financial, and Wealthsimple. With Power’s subsidiaries offering services throughout North America, Asia, and Europe, investors can receive exposure to multiple markets and businesses within one stock.

From a valuation perspective, the company’s current price-to-earnings ratio of 13.8 is below the sector medium of 14.2. This indicates that investors could pay less for a well-diversified financial company with a strong dividend yield of 4.7%.

An investment of $10,000 in Power 20 years ago, along with reinvested dividends, would have yielded a 12.7% annual return, and investors would have $109,300 sitting in their brokerage account today.

RBC

The banking industry holds some of the most profitable corporations in Canada, and RBC is the largest one within it. With diversified business segments and locations across the globe, the company will be able to continue to grow its operations and increase its current dividend yield of 3.5%.

RBC has a proven track record of providing reliable returns year after year. If an investor acquired $10,000 worth of RBC shares 20 years ago and reinvested all of the dividends, they would have $144,651 in their account today. That’s an annual return of 14.29%!

Foolish bottom line

There is no guarantee that these companies will offer similar returns in the next 20 years, but they’re certainly reliable options for investors. Both of these companies are in industries that aren’t going anywhere, and if these stocks take a hit, you can assume that every stock in your portfolio will as well.

Investing in great companies and reinvesting their dividends is a boring process, but it is a recipe for success for any investor.

Fool on!

Fool contributor Colin Beck has no position in any stocks mentioned.

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