The Motley Fool

3 Stocks to Buy and Hold for Decades

Buy-and-hold strategies are popular for their simplicity: simply buy a stock and leave it alone … for years. However, in order for that strategy to be effective, you need to find a stock that has strong fundamentals and a predictable future. This means a minimal amount of risk that could derail expectations, and that can be difficult in a world that’s changing as quickly as ours is.

However, the three stocks below should offer you a lot of long-term stability while also generating a lot of cash flow for your portfolio in the way of dividends.

Toronto-Dominion Bank (TSX:TD)(NYSE:TD) is an easy option for investors, because you’ll be hard-pressed to find a more stable and predictable stock on the TSX. Unlike U.S. banks, where rules are a bit looser, there’s a much lower risk that the banks will fail here in Canada, as that would be catastrophic for the economy as a whole, and the stakes would be too high for the government to ever allow that happen.

However, it’s unlikely TD will get to that point anyway, as the bank has done a great job of growing in North America, particularly south of the border, as it continues to expand its presence there. Recent tax cuts in the U.S. will help TD pad its earnings and could pave the way for even more growth down the road.

With a growing dividend that currently pays around 3.4% per year and the stock climbing more than 70% over the past five years, there are plenty of ways for investors to benefit from holding this stock over the long term.

Rogers Communications (TSX:RCI.B)(NYSE:RCI) is a household name in Canada, and rightfully so. A big player in the telecom industry, Rogers also owns the Toronto Blue Jays and part of the Maple Leafs, as the company has been successful in growing its brand and expanding into other industries.

The company has shown it is prepared to do what it takes to grow its sales, and that’s an important characteristic of a stock that will have a strong future. While it may be a bit less predictable than TD, Rogers is no less stable, averaging a profit margin of over 10% during the past five years.

Rogers currently pays investors 2.9% per year in dividends.

Thomson Reuters (TSX:TRI)(NYSE:TRI) might seem like a bit of an odd choice to hold for the long term, but if there’s one thing that the political environment in the U.S. has shown us, it’s the importance of a trusted name and news source. Thomson Reuters fits that mould well, and that’s a key reason why I see the company as having a bright, long-term future.

A few years ago I may have scoffed at the idea, thinking that people being self-sufficient would be able to get information themselves. And while that is still true, it’s important to have an authority when it comes to news that can be trusted, and that’s what sets Reuters apart from individuals and social media sites.

The stock can provide you with a lot of stability, and with a dividend of around 3%, it can also generate some strong cash flow for your portfolio.

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.

Fool contributor David Jagielski has no position in any of the stocks mentioned.

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