We’re just months away from the end of the year and it’s the perfect time to max out your Tax-Free Savings Account (TFSA). Although the TFSA contribution room accumulates over time, investing in the account early will help you maximize the impact of compounding.
Gathering a basket of robust stocks in your TFSA and holding them for decades is a surefire way to create durable wealth. With that in mind, here are three potential “forever stocks” you should consider.
I know what you’re thinking: Aren’t gas stations becoming obsolete? Demand for oil is likely to be subdued for several years as the global economy recovers from this crisis. By the end of the decade, most cars will be electric which means filling up at gas stations would be a thing of the past.
However, convenience store and gas station giant Alimentation Couche-Tard (TSX:ATD.A)(TSX:ATD.B) is well prepared for this eventuality. The company is actively rolling out electric charging stations across its stores in Europe and North America. Strategic partnerships in recent years will allow the company to offer self-serve checkout and cannabis products across its convenience stores.
Meanwhile, with $3.3 billion in cash on hand, the company can acquire rivals in foreign countries to expand its network. The runway for growth stretches across the world and is expected for several decades. That’s what makes this the perfect “forever stock” for your TFSA.
Nothing is more essential and reliable than healthcare real estate. NorthWest Health Property Investment Trust (TSX:NWH.UN) is the only pure-play medical real estate investment trust (REIT). That makes it an ideal TFSA forever stock.
NorthWest Health’s stock has proven its resilience during this ongoing economic crisis. Year-to-date, the stock is down only 3%, while the dividend remains as high as 7%. The fact that the majority of NorthWest’s tenants are clinics and hospitals makes this dividend one of the most reliable on the Canadian stock market.
Occupancy across the property portfolio is 97.3%, and 80% of the tenants are government-funded.
Another thing that makes this a forever stock is the duration of the leases. NorthWest’s average lease term is 14.5 years. That gives the team and the firm’s investors plenty of visibility to make investment decisions for the long-term. Cementing this further is the fact that the three out of four Northwest leases are linked to inflation.
If this isn’t a forever stock worthy of a TFSA, I don’t know what is.
No long-term value stock list is complete without mentioning Fortis (TSX:FTS)(NYSE:FTS). The utility giant is one of the few companies that expects to increase dividends in the years ahead and maintain its dividend this year.
That’s because the company’s key service – electricity – is absolutely essential. Fortis’ network of power plants might be capital-intensive upfront, but they guarantee stable cash flows for decades once operational.
At the moment, Fortis offers a decent 3.6% dividend yield and trades at 20 times earnings. If management successfully expands the dividend this year, the company could maintain its pedigree as a Dividend Aristocrat.
Your TFSA deserves “forever stocks” like Alimentation Couche-Tard.
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 Vishesh Raisinghani owns shares of ALIMENTATION COUCHE-TARD INC. The Motley Fool recommends ALIMENTATION COUCHE-TARD INC, FORTIS INC, and NORTHWEST HEALTHCARE PPTYS REIT UNITS.