RRSP Investors: 2 Stocks to Buy Now and Forget for Decades

Waste Connections Inc. (TSX:WCN)(NYSE:WCN) and another top Canadian stock are great candidates for a low-maintenance portfolio. Here’s why.

| More on:

Canadian investors want to build a comfortable retirement portfolio.

Some people simply pay a professional to look after their retirement planning, while others prefer a more hands-on approach. This can certainly save a few bucks by eliminating fees, but it also requires allocating serious hours for research and portfolio management.

In order to minimize the amount of helicopter time we spend over the holdings, it helps to own a few buy-and-ignore stocks. Let’s take a look at two companies that might be interesting picks.

Waste Connections (TSX:WCN)(NYSE:WCN)

As the name suggests, Waste Connections is in the business of looking after garbage. The company operates removal and transfer services for businesses and households in Canada and the United States. Waste Connections also has a division that specializes in cleanups for energy companies.

The firm continues to grow through acquisitions, and investors should see more deals in the coming years as the industry consolidates. At present, the business serves six million customers in 40 states and six Canadian provinces.

Waste Connections reported Q2 2018 adjusted net income of $0.65 per share, representing an increase of 18.2% over the same period last year. Management just upgraded the revenue, earnings, and free cash flow outlook for 2018, given the strong start to the year and positive pricing trends in the solid waste segment.

The garbage business is relatively recession resistant, so Waste Connections should be a good contender for a buy-and-forget spot in your portfolio.

Investors who’d bought the stock just five years ago paid about $35 per share. Today, it trades for about $103, and the move has pretty much been a steady upward trend.

Canadian National Railway (TSX:CNR)(NYSE:CNI)

CN is the only rail company in North America with tracks that connect to three coasts. This is an important advantage that is unlikely to change.

Why?

Attempts to merge railways tend to get blocked by competition watchdogs, and there isn’t much chance of competing lines being built along the same routes. CN isn’t void of competition; the company battles for business with the trucking industry and with other rail carriers on some routes. Overall, however, it’s a sweet business with a wide moat.

As the economy expands, CN should prosper, and management is making the necessary investments to ensure the company can meet rising demand for its services. The 2018 capital program is about $3.5 billion, roughly equivalent to one-quarter of revenue.

CN generates significant free cash flow ($1.3 billion in the first half of 2018) and has a fantastic track record of sharing the profits with investors. The compound annual dividend-growth rate is about 16% over the past 20 years.

The stock currently trades for $116 per share. Ten years ago, it was $26, adjusted for splits.

The bottom line

Waste Connections and Canadian National Railway should be reliable buy-and-hold picks for a self-directed RRSP investors who don’t want to hover over their holdings every day.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

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

More on Dividend Stocks

The sun sets behind a high voltage telecom tower.
Dividend Stocks

Should You Buy Northland Power for its 5% Dividend Yield?

Northland Power stock trades 52% below all-time highs and offers shareholders a tasty dividend yield of 5% right now.

Read more »

TFSA and coins
Dividend Stocks

2 Top Stocks to Add to Your TFSA in February 2024

These two TSX stocks can be excellent holdings for your self-directed TFSA portfolio to inject stability and tax-free wealth growth.

Read more »

dividends grow over time
Dividend Stocks

Passive-Income Seekers: Invest $10,000 for $400 or More in Annual Income

Are you interested in generating passive income? Invest $10,000 for a hefty annual income!

Read more »

Canadian Dollars
Dividend Stocks

Want Decades of Passive Income? 3 Stocks to Buy Now

Want passive income that could last a lifetime? These three top Canadian dividend stocks have a good chance of delivering…

Read more »

Two seniors float in a pool.
Dividend Stocks

Retiring on Dividends: How Much Do You Need to Quit Work?

Canadians might need more than $1 million to quit work, but can still live comfortably in retirement with sustained dividend…

Read more »

Happy couple being attended by office worker at office
Dividend Stocks

New Investors: 3 Top Tips to Get You Started

New investors may be itching to get started, but first, ensure you are properly set up and do your research!

Read more »

A plant grows from coins.
Dividend Stocks

With a 7.9% Dividend, This TSX Stock Can Help You Make $1,975 Per Year

Make steady income with this high yield dividend stock. This Canadian corporation has increased its dividend for 29 years.

Read more »

grow dividends
Dividend Stocks

2 Dividend Stocks to Use as Building Blocks for Lasting Wealth

Dividend stocks that are raising their dividends over time could create lasting wealth for investors. Here are a couple of…

Read more »