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My 3 Best TSX Stocks to Buy and Hold Long-Term

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Even though we can’t predict the future, we can plan according to the generally accepted premise that it’s going to be an extension of the present. For investing, it means relying on the past and present performance of an asset to predict its future. This doesn’t always pan out the way we intended, but in most cases, it does, and that’s where diversification comes into play.

If you create a portfolio with 10 stocks that differ from one another based on sector, industries, market capitalization, and a few other factors, you can mitigate the overall impact of underperformance. Another way you can control the segment of your financial future that’s tied to your investments is by choosing good businesses and staying with them for as long as possible.

There are three stocks that should be on your buy-and-hold list.

A growth-oriented bank stock

National Bank of Canada (TSX:NA) is one of the best growth stocks in the banking sector. Even if we discard the unnatural growth phase the stock has gone through in the last 12 months, which shot the price up 49.5% and pushed the yield down to 3%. The bank is a pretty solid growth bet. Its 10-year compound annual growth rate (CAGR) is 13.8%), but even if we consider a more sustainable 10% yearly growth rate, it can grow your capital over t0 times in less than 25 years.

While not part of the Big Five, the bank enjoys the same rock-solid stability that’s characteristic of the banking sector in the country. It has a concentrated national presence, which is bad from a diversification perspective, but good from a customer loyalty angle, which makes it an attractive long-term buy.

A generous dividend stock

REITs are usually very generous with their dividends, but they are also relatively non-chalant about slashing their dividends, as was evident in 2020. But some REITs proved their mettle in the last year’s pandemic, and Nexus REIT (TSX:NXR.UN) is one of them. It focuses on industrial properties and has a diversified portfolio of 82 properties.

The stock fell over 37% during the crash, but has recovered and even grown beyond its pre-pandemic height. It grew over 66.8% in the last12 months alone, and despite its impressive growth and lucrative 6.2% yield, the stock is still very attractively valued.

It’s fairly valued, offers a mouthwatering yield, and has a stable payout ratio, which stayed stable even during 2020, and was one of the reasons the REIT didn’t slash its dividends when many others in the industry did. So if you want to hold on to a high-yield stock for a long time, Nexus might be a good option.

A powerful growth stock

If you want to harness the power of a growth stock that has been meeting expectations and offering exceptional returns for over a decade, goeasy (TSX:GSY) is a valid contender. The stock has grown over 1900% in the last decade and offers a powerful 10-year CAGR of 39%. It’s also a Dividend Aristocrat, and even though its yield (1.7%) is nothing to write home about, its payout growth has been beyond impressive.

From $0.18 in 2017 to $0.66 in 2021, the company has grown its payouts 3.6 times in the last four years. goeasy is an alternative finance company that offers personal loans to the individual that doesn’t fit the bill for conventional banks.

The process is fast and goeasy is virtually everywhere, that is, 416 locations in 177 cities. This presence, along with the fact that it caters to a relatively broad market segment with little competition, makes goeasy a powerful long-term holding.

Foolish takeaway

It’s important to note that while these three TSX stocks are ideal long-term holdings, you don’t have to buy them right away. National Bank and goeasy are relatively overvalued right now, and you might want to wait for a dip before you add them to your portfolio.

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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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