Everything that goes up in price irrationally falls down to the ground even quicker. The recent fall in commodities and cryptocurrencies are apt examples. Lumber prices quadrupled this year amid a hot real estate market and supply shortage. However, the exuberance soon waned, and lumber prices have fallen 60% in the last two months.
Similar is the case with Dogecoin. The meme crypto token was the top performer, gaining more than 13,000% in just a few months in 2021. But was the rally backed by fundamentals? No! So, the coin crashed by almost 75% since May this year.
At the same time, many quality TSX stocks continued to march higher. Their price swings were much more digestible compared to Dogecoin and lumber, and returns are low but stable. As a discerned long-term investor, ask yourself if you are really okay losing your peace of mind to obtain higher returns. It’s really not worth it to invest your hard-earned money based only on social media popularity.
Consider following TSX stocks that offer low-risk, moderate return prospects for the long term.
Enbridge
If you want to become rich in just a few months, Enbridge (TSX:ENB)(NYSE:ENB) might not be a fitting stock for you. But if your investment horizon is very long, like five, 10, or 20 years, Enbridge could create significant wealth for you.
Enbridge stock is relatively less volatile, and its stable dividend profile is a huge plus. It yields nearly 7%, way higher than broader markets. Notably, Enbridge has increased dividends for the last 26 consecutive years. Its stable operations earn visible earnings that facilitate stable dividends.
ENB stock has delivered an average total return of 11% in the last decade, almost triple than the TSX Composite Index. Although that falls short of growth stocks, Enbridge’s juicy yield stands way taller. It will create a stable passive-income stream in your sunset years and outperform in volatile times.
The midstream energy giant Enbridge will likely keep earning stable cash flows for years. Its unique energy pipeline network and long-term contracts with investment-grade clients should fuel stable earnings growth for years. And that’s why it intends to increase dividends by 5-7% annually for the next few years.
Air Canada
Now, Air Canada (TSX:AC) could not fit a low-risk criterion here, but it offers handsome growth prospects for the long term. The flag carrier stock has almost doubled since November. There is a big possibility that AC stock could continue its upward movement as we move out of the pandemic.
Canada’s biggest passenger airline Air Canada has a strong balance sheet that acted as a shield during the pandemic. In addition, its prominent market share and operational efficiency should drive impressive growth once travel restrictions ebb.
Air Canada stock has been a robust wealth creator for shareholders in the last decade. It returned almost 1,500% in the last 10 years, prior to the pandemic. It will likely repeat its historical performance as air travel demand returns in the post-pandemic world.
