2 Stocks to Buy Now and Hold for Decades

There are some stocks that you can hold on to for years and years and rely on their fundamental strengths to grow and offer you decent returns over decades.

| More on:
edit Businessman using calculator next to laptop

Image source: Getty Images.

The world is changing, and it’s changing quite rapidly. And the change is permeating every facet of our lives, including investing. Take e-commerce and crypto as an example. E-commerce has revolutionized the business landscape, and while it sent some asset classes and businesses through the roof, others are steadily going down.

Bitcoin mining consumes more electricity than Finland’s 5.5 million population, and the total cryptocurrency market capitalization is higher than Alphabet’s.

Change has always been a part of the investment world. People who successfully predicted these changes before others and acted first usually became very successful, while the ones that couldn’t adapt on time perished.

The good news is that in this realm of variables, there are certain constants. Some investments and companies are almost evergreen. And even if you can’t hold them forever, you can still hold them for decades and take advantage of the time element of investing.

A transportation company

TFI International (TSX:TFII)(NYSE:TFII) is one of the most successful post-pandemic stocks and a consistent grower that outpaced several companies in the “length” of the recovery-fueled growth phase. It grew over 430% after the crash and almost 165% in the last 12 months, but the recovery momentum is finally slowing down. The price has barely budged since the end of July.

The good news is that despite its awesome growth, the value is relatively reasonable, at least from an earnings perspective, since the company is still trading at a price-to-book ratio of 5.2 times. The current growth is almost unprecedented for the company, but it was a decent growth stock even before the pandemic hit and catapulted several e-commerce businesses through the ceiling.

What makes TFII a decent holding for decades is its business model, network, and presence. The company operates one of the largest trucking fleets in North America and has an impressive logistics network. It has also started to expand into Mexico. E-commerce will likely stay strong for decades, and TFII, a crucial cog in the North American e-commerce industry, may keep prospering long term.

A golden company

One asset class that has survived the test of time and holds its value no matter where you are across the globe is gold. Investing in shiny metal is also a good way to hedge your portfolio against market downturns, as it usually thrives when the market is down. And if you invest in a royalty company like Franco Nevada (TSX:FNV)(NYSE:FNV), you might see decent capital appreciation in strong markets as well.

The company’s relatively “hands-off” approaches to the golden metal — i.e., royalties and streaming — is one of its main attractions. It makes the company relatively less vulnerable when the gold prices are down, yet it gets to capitalize on the upside. The long-term growth prospects of Franco Nevada are quite strong if you consider the 10-year 16.7% CAGR, which is both high enough (especially if you are holding it for decades) and sustainable.

Foolish takeaway

Both Franco Nevada and TFI International are Dividend Aristocrats. Yet dividends are not the reason you should consider investing in these dividend stocks. Their long-term capital-appreciation potential makes them holdings worthy of staying in your TFSA or RRSP for decades. You might consider reinvesting the dividends back into your stake, as they might not offer a sizeable passive income anyway.

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.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares) and Alphabet (C shares).

More on Dividend Stocks

growing plant shoots on stacked coins
Dividend Stocks

Here Are My Top 5 Dividend Aristocrats to Buy Right Now

Now is the time to buy these top five dividend aristocrats at their two-year low before they recover to 2021…

Read more »

edit Real Estate Investment Trust REIT on double exsposure business background.
Dividend Stocks

Is NorthWest REIT Stock the Best High-Yield Dividend for You?

NorthWest REIT (TSX:NWH.UN) offers a substantial dividend, but exercise caution with this riskier stock.

Read more »

Dividend Stocks

Income Stocks: A Once-in-a-Decade Chance to Get Rich

These two income stocks are among the best on the TSX for those seeking consistent total returns over a long-term…

Read more »

dividends grow over time
Dividend Stocks

3 Top Royalty Stocks With Dividend Yields of up to 9%

When it comes to secured dividends, these three are top notch. Each offers exposure to royalties through franchising and ultra-high…

Read more »

Golden crown on a red velvet background
Dividend Stocks

This 8 Percent Dividend King Pays Out Every Month

Canoe EIT Income Fund (TSX:EIT.UN) is a staple for monthly income investors.

Read more »

sad concerned deep in thought
Dividend Stocks

Should You Buy Fortis or TC Energy Today?

These stocks have great track records of dividend growth.

Read more »

Dice engraved with the words buy and sell
Dividend Stocks

A&W Stock: Buy, Sell, or Hold?

Shares of A&W (TSX:AW.UN) stock popped by 20% after a major corporate restructuring announcement investors love.

Read more »

Payday ringed on a calendar
Dividend Stocks

3 Monthly Paying Dividend Stocks With Handsome 7% Dividend Yields

Given their healthy cash flows and high yields, I am bullish on these three monthly-paying dividend stocks.

Read more »