The Motley Fool

Income for Life: Here Are 3 “Forever Assets” I’d Buy in 2019

Hi there, Fools. I’m back again to highlight three attractive large-cap stocks on the TSX Index. As a quick reminder, I do this primarily for RRSP investors because solid large-cap companies offer unmatched portfolio stability in all types of markets and usually provide fat dividends (and buybacks) year after year.

They won’t make you rich overnight. But if you want to prioritize steady wealth building and protection, large-cap “forever assets” should represent a significant chunk of your portfolio.

Let’s get to it.

Royal treatment

Kicking off our list is none other than Royal Bank of Canada (TSX:RY)(NYSE:RY), which has a market cap of about $133 billion. Shares of the banking gorilla are down roughly 10% over the past year versus a loss of 13% for the S&P/TSX Capped Financial Index.

RBC wrapped up 2018 on a strong note. In Q4, net income climbed 15% to $3.25 billion. More important, return on equity improved 100 basis points to 17.6%, while net interest margins expanded 12 basis points to 2.77%.

“While increased protectionism and geopolitical risks created market uncertainty throughout the year, our results did benefit from rising interest rates, GDP growth, a benign credit environment and U.S. tax reform,” said President and CEO Dave McKay.

With a scrumptious dividend yield of 4%, RBC seems like the perfect blue-chip to ride into 2019 (and beyond).

Roger that

With a market cap of $36 billion, Rogers Communications (TSX:RCI.B)(NYSE:RCI) is next on our list. Shares of the telecom giant are up about 9% over the past year versus a loss of 3% for the S&P/TSX Capped Telecommunication Services Index.

Rogers is also heading into 2019 on a high note. In the most recent quarter, net income jumped 17% to $594 million, while revenue increased 3%. Wireless postpaid subscribers grew by a net 124,000, while monthly churn improved 7 basis points to 1.09%.

“We are pleased with our progress and confident in the future of this roadmap,” said President and CEO Joe Natale. “Given our strong year to date performance, we are raising our full-year guidance.”

When you combine the stock’s comforting beta of 0.6 with a solid yield of 2.7%, Rogers might be too good to pass up.

Bright idea

Rounding out our list is Suncor Energy (TSX:SU)(NYSE:SU), which sports a market cap of about $60 billion. The oil and gas giant is down 14% over the past year versus a loss of 25% for the S&P/TSX Capped Energy Index.

Suncor is doing what it can to handle Alberta’s mandatory production cuts and lack of market access. For 2019, management plans flat capital spending compared with 2018, and expects upstream production to rise 10%.

“All of these projects and the corresponding value they represent are largely independent of market conditions and egress constraints,” said CEO Steve Williams, “positioning us well to continue returning increasing free funds flow to shareholders through dividends and share buybacks and strengthening the balance sheet.”

With Suncor stock at its 52-week lows and sporting a dividend yield of 3.6%, now might be a great time to take a long-term position.

The bottom line

There you have it, Fools: three large-cap “forever assets” worth looking into.

As always, don’t view them as formal recommendations. They’re simply strong ideas for further research. Even large-cap stocks can disappoint, so plenty of due diligence is still required.

Fool on.

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Brian Pacampara owns no position in any of the companies mentioned.


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