TFSA Investors: 2 of the Best Buy-and-Hold Stocks Today

Finding companies that operate in industries that are unavoidable, like Park Lawn Corp (TSX:PLC), is a great way to set yourself up for long-term success.

| More on:
Glass piggy bank

Image source: Getty Images

Every now and then, you’ll need to sell some stocks that have become overvalued or whose businesses have matured and are starting to go in decline. While it may have been a great investment, investors need to know when to take their profits and recycle the capital to better opportunities.

There are some stocks, however, that you’ll never need to sell — stocks that will last the test of time, whose business and economics make give it an unmatched advantage and whose management is wonderfully long-term oriented, so you know your capital will be protected and in good hands.

The long-term strategy of buying stocks is one that was popularized by none other than Warren Buffett, and he has proven the incredible growth you can build in your portfolio by buying stocks to hold for extended periods.

For those investors looking for some top Canadian stocks to store in your portfolio and build wealth, two great options to buy today are Park Lawn (TSX:PLC) and Canadian Apartment Properties REIT (TSX:CAR.UN).

Park Lawn

Park Lawn is a funeral, cremation, and cemetery provider, and is, in fact, the largest death care company in Canada.

One of the main reasons why it’s such a great long-term hold is due to its economics. Its industry is virtually unavoidable; as the old saying goes, nothing is certain except death and taxes.

It’s unfortunate to say, but the death care industry has been growing, especially as the population grows and ages, so it’s inevitable that its sales will continue increase organically.

Besides these obvious and unfortunate industry facts, Park Lawn is a really well-run company, and one that has been growing its assets considerably through acquisitions. In fact, on acquisitions alone, the company has spent $170 million so far in 2019 and spent $275 million in 2018. In total, it now has 103 cemeteries, 95 funeral homes, and 38 crematoria across Canada and the United States.

In addition to the organic growth it sees and its growth from acquisitions, Park Lawn has also been increasing its margins. Up to the trailing 12 months, its earnings before interest, taxes, depreciation, and amortization margin had increased by 520 basis points since 2016.

Its stock is up more than 150% in the last five years, showing just how incredible its growth has been, and you can expect more of the same, as it continues to execute at a high level.

Canadian Apartment Properties

CAPREIT is a real estate operator of residential properties across Canada and Europe, though nearly 90% of its assets are in Canada.

It’s one of the strongest real estate funds in the strongest real estate sector: residential.

What gives real estate companies their strength generally are their underlying assets and the locations they exist in. This is what makes CAPREIT so strong.

While it is geographically diversified, 45% of it is still exposed to Ontario, where its occupancy rate is 99.6% — clearly, one of the strongest real estate markets in Canada. In total, its company-wide residential suites occupancy rate sits north of 99%, and its MHC occupancy is 97.5% — both very strong.

It also has growth projects in development to complement the growth it’s seen from high-quality acquisitions.

Through its solid growth strategies, it has been growing its normalized funds from operations (NFFO). In the first half of the year, NFFO per unit was $1.03.

Its dividend yields just over 2.5% today, and the payout ratio is highly stable and consistently around 65%.

It is easily one of the strongest real estate companies in Canada, so if you want exposure to real estate and residential real estate at that, CAPREIT should be at the top of your buy list.

Bottom line

Building your portfolio with long-term stocks that you should expect to hold forever will give you the best chance at growing your wealth while protecting it, too.

These stocks are some of the best in Canada and serve industries that are staples of the economy, so you know your capital is protected.

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 Daniel Da Costa has no position in any of the stocks mentioned.

More on Dividend Stocks

Increasing yield
Dividend Stocks

3 Income Stocks With Big Yields to Consider in April 2024

If you haven’t yet made your March investments, here are three income stocks to buy the dip and lock in…

Read more »

Senior Man Sitting On Sofa At Home With Pet Labrador Dog
Dividend Stocks

RRSP Investors: Don’t Miss Out on This Contribution Hack!

This hack has so many benefits for you -- not just when you put it in your RRSP but for…

Read more »

A red umbrella stands higher than a crowd of black umbrellas.
Dividend Stocks

Passive Income: 2 Safe Dividend Stocks to Own for the Next 10 Years

Dividend stocks such as Manulife and Fortis can help you generate a stable and recurring passive-income stream.

Read more »

Young woman sat at laptop by a window
Dividend Stocks

3 Dividend Stocks Everyone Should Own for the Long Haul

For investors looking for top-tier dividend stocks to buy and hold for the long term, here are three of my…

Read more »

Golden crown on a red velvet background
Dividend Stocks

Dividend Royalty: 3 Fabulous Stocks to Buy Now for Decades of Passive Income

Rogers Communications stock and Canadian Natural Resources stock could pay you dividends for decades to come.

Read more »

Payday ringed on a calendar
Dividend Stocks

3 Dividend Stocks That Pay Me More Than $54.57 Per Month

These three dividend stocks have done me well over the years, so let's look at how much I've gotten in…

Read more »

Dividend Stocks

The Top Canadian REITs to Buy in April 2024

For growth and dividends this April, look to these two REITs that have quite the promising present as well as…

Read more »

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Dividend Stocks

TFSA Magic: Earn Enormous Passive Income That the CRA Can’t Touch

If you're seeking out passive income, with zero taxes involved, then get on board with a TFSA and this portfolio…

Read more »