The Canadian stock market is full of excellent opportunities for investors who want to generate wealth using their investment capital in the long run. Finding the right high-quality investments for your portfolio to buy and hold for decades is the real challenge.
You have to pick assets that can continue providing you with substantial long-term returns. Finding the right companies to invest in and remain invested in for a long time could be the key to becoming a successful investor.
If you are starting investing and looking for stock picks to use as a foundation for your investment portfolio, I will discuss three top Canadian stocks that should be on your radar for long-term buy-and-hold assets.
A high-growth tech stock
Lightspeed POS (TSX:LSPD)(NYSE:LSPD) can be considered a no-brainer for investors with a long investment horizon. The Canadian tech company has been one of the top performers on the stock market since it became a publicly traded company a couple of years ago. Since its IPO in March 2019, Lightspeed POS stock is up by 455%, and it does not show any signs of slowing down.
The innovative products and services offered by the Canadian tech company and its strategic acquisitions for global growth have been primary contributors to its rapid ascent in the stock market. Businesses of all sizes are working with the company to fuel their growth.
While Lightspeed POS stock comes with a premium price tag, trading for a price-to-sales multiple of 62.11, the stock still has plenty of room to grow in the increasingly digital world.
Growing new industry
Northland Power (TSX:NPI) is another excellent long-term investment opportunity that you should consider adding to your portfolio. It is no secret that renewable energy will become one of the biggest forces in the coming years. If you want to get exposure to the growing industry, Northland Power stock is one of the best assets to consider for your portfolio today.
The renewable energy sector saw significant growth last year. The sector has been a little slow to exhibit growth for the last few months. While it might make some investors feel cautious about establishing a position in the industry, I believe that it’s an opportunity to enter the space before the barriers to entry become too high.
Northland Power is one of the most prominent Canadian renewable energy companies, providing its customers with power through a diversified portfolio of renewable power-generation facilities. The stock is trading for $42.71 per share, and it pays its shareholders at a decent 2.81% dividend yield.
A major Canadian financial institution
The Royal Bank of Canada (TSX:RY)(NYSE:RY) is one of the top Canadian stock picks for Canadians who want to add dividend stocks to their portfolios. Canadian investors have no reason not to add any of the Canadian Big Six Bank stocks to their portfolios. The Canadian financial institutions have displayed phenomenal resilience for several decades.
While banking stocks are not considered to be growth drivers for the TSX, the stock market conditions have been slightly different since the pandemic. After a rough year in 2020, RBC and its peers in the industry set aside substantial cash for provisions for credit losses. The government’s efforts to pump stimulus into the economy paid off, and the banks did not need to eat into the funds.
With the provisions for credit losses now lower, RBC has much more cash to use for further growth. Shares of the bank are trading for $127.72 per share at writing, and it boasts a 3.38% dividend yield.
Investing in the stock market is a more hands-on approach to using your investment capital to generate long-term wealth growth. It is not the easiest strategy to master but can prove to be a very successful strategy to help you become a wealthy investor, provided you can find the right investments.
There will be several assets that you should buy and then sell after some time to turn a quick profit over the years. However, the core holdings in your portfolio will be stock picks that you can buy and hold forever to enjoy consistent and reliable returns in the long run.
Lightspeed POS, Northland Power, and the Royal Bank of Canada are three stock picks that could make an excellent foundation for 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 owns shares of and recommends Lightspeed POS Inc.