Stocks have outperformed all the asset classes over the last few decades. But many investors overassume stock market risk, but perhaps it provides plenty of opportunities based on risk appetite and return requirements. Here are three TSX stocks you can consider for long-term investing.
Consider Canadian utility stock Emera (TSX:EMA). It is a $13 billion diversified utility company that runs regulated electricity and natural gas portfolio. Emera operates in six countries and serves almost 2.5 million customers. It makes nearly two-thirds of its earnings from the United States.
Utility stocks are relatively safer, because they generally make stable earnings in any economic condition. Though utilities grow typically very slowly against broader markets, Emera is a comparatively fast-growing company. EMA stock returned 10% compounded annually in the last decade, beating the TSX Composite Index.
Driven by stable earnings, Emera has managed to pay dividends for the last 28 consecutive years. It yields 5% at the moment, higher than TSX stocks at large. The company will likely continue to pay increasing dividends in the future backed by a solid balance sheet.
If you are looking for a low-risk investment and a decent passive income, Emera could be your top choice.
Premium Brands Holdings
One industry that’s fast growing and also has an all-weather appeal is the food-processing industry. And Canadian company Premium Brands Holdings (TSX:PBH) stands tall in the space. Its superior growth and a broad range of specialty food products differentiate it from its peers.
It is a $4.7 billion company that manufactures specialty foods and operates a premium food-distribution business. PBH makes almost two-thirds of its business from Canada, while the rest comes from the south of the border. It owns and operates popular brands like Harvest Meats, Piller’s, Freybe, Expresco, and Deli Chef, etc.
The company had a presence in Western Canada and revenues of a mere $0.2 billion in 2004. Now, after 16 years, Premium Brands operates in almost entire North America and has revenues of around $4 billion.
Premium Brands’s revenues grew by 23% compounded annually in the last decade. That’s quite a feat and resembles a tech growth stock. Notably, the company aims to achieve $6 billion in revenues by 2023.
PBH stock is up almost 75% since its March 2020 lows. The stock offers a solid investment proposition given its strong product portfolio and strong growth potential.
Conservative investors would generally avoid cannabis stocks. But if you are okay with taking a relatively higher risk, it makes sense to bet on them with U.S. legalization in the pipeline.
Its strong presence in Canada and Europe positions it well ahead among its peers. Its ongoing merger with Tilray is expected to close next quarter. The combined entity will likely have a greater dominance in Europe. Interestingly, legalization in the U.S. would open up a bigger market for cannabis companies like Aphria.
Aggressive investors who can stomach large swings of pot stocks can consider investing in cannabis for above-average potential gains.