A portfolio consisting of BCE (TSX:BCE)(NYSE:BCE), Suncor (TSX:SU)(NYSE:SU), and Toronto Dominion Bank (TSX:TD)(NYSE:TD) is the ideal combination for long-term investing success. You can buy and hold the stocks until necessary. Most probably, you won’t sell at all.
BCE doesn’t demand deep-dive research. How can you go wrong with a business that’s operating in one of the world’s most protected telecom sectors? The industry is a monopoly that the major carriers, including BCE, face little competition. As a result, this telecom giant can maintain high operating margins.
Canadians are enjoying competitive, quality telecommunications services. BCE, for one, provides the most advanced and efficient wireless and broadband internet services in the world, download and connection speeds to its clients.
Likewise, telecoms in Canada are outshining the counterparts around the world whether you measure it in terms of per wireless subscriber, wireless connection, or as a percentage of revenues.
Given that Canadians are known to be heavy users of telecommunication services, BCE has set up world-class networks. The prices of wireless and internet services will keep on increasing as the demand for more and better services increases. Hence, expect BCE to invest in the highest quality wireless networks to meet the demand.
Suncor is among the safest buy for long-term hold in the energy sector. Although the gain of the stock so far this year is only 7%, there is no cause for alarm. This top energy stock will recover from this low, given its strong fundamentals.
Analysts covering the stock are maintaining a buy rating. Based on forecasts, the potential upside is 51.6% in the months ahead. The drop in price is market-related as Suncor recently reported another strong quarter, with profit rising significantly.
The stock is also a good pick for value investors. No wonder Warren Buffett sold his Suncor shares in 2016 only to repurchase the stock in 2018. The financial health of the company is not suspect as Suncor has the best growth prospects among its peers.
Suncor is a winning stock given the 4.32% dividend plus the future capital gain. The stock has demonstrated before its ability to outperform the market.
Toronto Dominion or TD is a pre-eminent bank stock not only for its popularity, but also for its resiliency to endure recessions or market crashes. No further explanation is necessary to justify TD as the hands-down choice of long-term investors.
TD rose to prominence during the 2008 financial crisis. While most financial institutions were struggling with the contagion effects of the international crisis, the bank went to perform. TD was the only bank to report both revenue and earnings growth.
Amid the warnings of a coming recession because of the inverted yield curve and overextended trade war, TD is still up by 13.6% year to date. From an investment perspective, you have to take into account the bank’s 162-year dividend history, which would be the same length of time TD will deliver passive income to you.
Healthy returns forever
The buy and hold strategy is widely used by investors adopting a long-term perspective. You don’t have to worry about market fluctuations anymore. In the long run, you’ll still get healthy returns.
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Fool contributor Christopher Liew has no position in any of the stocks mentioned.