Diversifying your portfolio takes time and a lot of patience. Finding the right mix of income and growth stocks for long-term growth is something that few investors have an appetite for. Fortunately, the market gives us plenty of options to pick some truly superb long-term stocks.
Here are a few options to consider adding to your portfolio.
Superb long-term stocks: Starting with a telecom?
Canada’s telecoms are great long-term investments. They are considered some of the best defensive investments on the market and provide a handsome dividend. That dividend is backed by a reliable and stable revenue stream.
So which telecom should prospective investors consider? Shaw Communications (TSX:SJR.B)(NYSE:SJR) is unique among its peers. Shaw offers investors a monthly dividend, over the quarterly distribution offered by other telecoms. That dividend currently works out to a respectable 3.29% yield.
To put that earnings potential into context, a $30,000 investment in Shaw will provide just shy of $1,000 in the first year.
How about an investment that is renewable?
Another area of investment that is growing in importance is renewable energy. For that reason, TransAlta Renewables (TSX:RNW) is another option for investors to consider. TransAlta fits nicely in a list of superb long-term stocks for a few reasons.
TransAlta boasts an all-renewable portfolio of facilities located across the U.S., Canada, and Australia. Those facilities also encompass multiple technologies including wind, solar and hydro.
TransAlta adheres to the stable (and lucrative) utility business model. In short, regulated contracts that span decades provide TransAlta with a steady and recurring source of revenue. That revenue is then passed on to new investments and the company’s attractive dividend.
That dividend is also distributed to investors on a monthly basis, making it an attractive option for nearly any portfolio. The current yield amounts to an appetizing 4.87%.
Perhaps most importantly is the fact that, unlike its fossil-fuel burning utility peers, TransAlta already operates an all-renewable portfolio. This means that earnings get routed towards further growth instead of transitioning older dirty facilities towards renewables.
In other words, TransAlta is a superb long-term stock to own for decades of uninterrupted growth.
This is a retailer you should buy
Retail stocks are typically not regarded as ideal long-term holdings. One exception to that is one more superb long-term stock to own, Alimentation Couche-Tard (TSX:ATD.B).
Couche-Tard is one of the largest convenience store and gas station operators in the world. Convenience stores and gas stations may not sound like a viable investment at first glance, but they do generate solid revenue streams.
That potential has been largely muted since the pandemic began, as there are fewer commuters on the roads. As a result, the stock has remained largely flat over the past year. This makes it an ideal buy for long-term growth investors to buy at pre-pandemic levels.
What’s more, the underwhelming performance we’ve seen during the pandemic will likely change in 2021. As markets continue to reopen, sales will ultimately pick up again, making Couche-Tard a great long-term pick.
Another interesting point about Couche-Tard is that the company has expanded aggressively over the years. Each time, the company has realized significant synergies and earnings bumps. The fact that Couche-Tard is awash in cash and has ample credit available could mean another deal is on the horizon.