Top 2 Long-Term Growth Stocks to Buy in February

These two Canadian companies have both proven to have sustainable business models that provide for solid long-term growth as well as income, making them the perfect addition to your portfolio today.

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Often times business with have a long-track record of growing slowly but surely consistently make for the best investments.

Rather than trying to find a turnaround company or make a prediction that may not come to fruition, these companies are known to many investors, but get passed up because they don’t seem too exciting.

If the business has a strong management team, however, a great long-term goal and a dominant position in its industry, it doesn’t matter how exciting the business is.

Companies with long-term track records of success have achieved the results they have for a reason.

Over the long run, looking for businesses that continue to prove they can deliver the goods for investors are the companies you should be focused on buying.

Two of the most attractive long-term growth companies on the TSX to buy today are Morneau Shepell Inc (TSX:MSI) and Brookfield Infrastructure Partners LP (TSX:BIP.UN)(NYSE:BIP).

Morneau Shepell

Morneau Shepell is a rapidly growing HR services company that allows other businesses to outsource some or all of their HR needs to it.

It operates mainly in Canada and the United States, with just 5% of its business coming outside those two main markets.

The company has had a strong history of growth, through both acquisition as well as organically.

Morneau Shepell has strong scale, meaning it can offer other company’s services more cheaply than the companies themselves can. Plus, because so many of its services are complementary, it ends up growing sales from retained clients.

It works the same way when it acquires new companies, bringing over their old customers and turning them into new ones for the other services it offers.

Another strong factor of Morneau Shepell’s business is the amount of recurring revenue it receives. This helps insulate cash flows and make the company’s growth much more stable, as well as making the investment less risky for investors.

The stock pays a dividend that yields roughly 2.25% for investors today, returning some cash while the company continues to grow rapidly.

Brookfield Infrastructure

Brookfield is an owner and operator of a number of crucial infrastructure assets around the world in such locales as North America, South America, and the Asia-Pacific as well as in Europe.

The company is an investment company first and foremost, sourcing new potential deals for companies facing temporary headwinds or trading undervalues for some reason and in need of a revamp.

Brookfield uses this opportunity to buy the business while its still undervalued, then works to improve all facets of the business using its strong execution and impressive business operating expertise.

The newly updated and more efficient company not only makes Brookfield’s investment worth more, but also increases the assets earnings potential. It then uses the funds it is  receiving from all its current assets to source its next deal.

It’s a great strategy and relies only on Brookfield’s ability to find high-quality investments or investments, as well as its ability to grow and optimize the business, both of which Brookfield has proven it can do time and time again.

Brookfield pays a dividend to investors that yields roughly 3.7% — an attractive dividend rate funded by top-quality infrastructure projects around the world.

Bottom line

The theme with both these companies is a long-track record of strong growth and value creation for shareholders over the past. And although past performance doesn’t guarantee future success, it’s a pretty strong indicator.

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. The Motley Fool recommends BROOKFIELD INFRA PARTNERS LP UNITS, Brookfield Infrastructure Partners, and MORNEAU SHEPELL INC.

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